In a major development aimed at bringing our economies closer, Nepal and India have expedited the process to establish a separate mechanism for an electronic payment system between the two countries. The agreement signed between the National Payments Interface of Nepal and the Unified Payment Interface of India, as agreed upon by the two governments, is a promising development. This agreement signifies a significant stride towards streamlining cross-border transactions, alleviating the difficulties associated with traditional monetary exchanges. The agreement was signed in the presence of Nepal Rastra Bank Governor Maha Prasad Adhikari and Reserve Bank of India Governor Shaktikanta Das in Mumbai on Thursday, establishing a joint mechanism to oversee transactions carried out via the electronic payment system, presenting a forward-looking approach to enhance economic cooperation.
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The agreement between the National Payments Interface of Nepal and the Unified Payment Interface of India is poised to revolutionize cross-border transactions by leveraging electronic payment gateways. This marks a milestone in digital payment between Nepal and India. The introduction of a digital payment system is expected to enable people-to-people fund transfers through mobile banking, providing a convenient and efficient means of financial transactions. As per the agreement, the Nepal Clearing House outlines the ease with which Nepali users can make bank transfers to India using a unified payment interface (UPI) ID through mobile banking. Simultaneously, Indian users can seamlessly transfer funds to Nepal using a unique identifier, often a mobile number. This arrangement aligns with the global trend towards digital financial solutions. Beyond its impact on individuals, the cross-border payment system is expected to bring relief to Indian visitors, sparing them the inconvenience of carrying large sums of cash, particularly as Indian banknotes above INR 100 denominations are prohibited in Nepal.
Nepal and India signed the initial bilateral agreement for the digital payment system during Prime Minister Puspa Kamal Dahal's visit to India last June. The implementation, originally slated for the end of January this year, was delayed as Indian banks needed time to update their mobile apps to incorporate Nepal's payment features. The accelerated efforts by Nepal and India to establish a cross-border digital payment system now signal a positive development for economic cooperation and financial inclusion. While challenges and delays are inevitable in such initiatives, the long-term benefits in fostering seamless financial transactions and promoting technological innovation far outweigh the temporary setbacks. This collaborative effort is poised to strengthen the economic ties between the two nations, setting the stage for a more interconnected and digitally-driven future. The electronic payment system, once fully implemented, will bring our two economies even closer.
