Tag: Nepal

Indo-Nepal Remittance: RBI enhances per transaction ceiling 4-fold to ₹2 lakh

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The Reserve Bank of India has made enhancements to the Indo-Nepal Remittance Facility Scheme, whereby the ceiling per transaction has been increased four-fold to ₹2 lakh and the cap of 12 remittances in a year per remitter has been removed.

The aforementioned enhancements, which come into effect from October 1, have been announced to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal, RBI said in a circular to all Banks participating in the National Electronic Funds Transfer facility.

Under the scheme, the beneficiary receives funds in Nepalese Rupees through credit to her / his bank account maintained with the subsidiary of State Bank of India in Nepal, — Nepal SBI Bank Limited (NSBL) or through an agency arrangement.

The central bank said as hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances.

The central bank asked banks to put in place suitable velocity checks and other risk mitigation procedures.

Thje RBI emphasised that “the enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.”

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RBI hikes per transaction cap to Rs 2 lakh from Rs 50,000, BFSI News, ET BFSI

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Reserve Bank on Friday hiked the ceiling on remittances per transaction from India to Nepal to Rs 2 lakh from Rs 50,000, a move that will help facilitate retirement and pension-related payments to ex-servicemen settled in the neighbouring country. Besides, the central bank has removed the cap of 12 remittances in a year per remitter.

“As hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of Rs 50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances,” Reserve Bank of India (RBI) said in a circular.

While increasing the ceiling, RBI has also advised banks to put in place suitable velocity checks and other risk mitigation procedures.

“The enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled/ relocated in Nepal,” it said.

The circular is addressed to Chairman/ Managing Director/ Chief Executive Officer of all banks participating in NEFT (National Electronic Funds Transfer).

The Indo-Nepal Remittance Facility Scheme was launched by RBI in May 2008 as an option for cross-border remittances from India to Nepal, with special focus on requirements of migrant workers of Nepali origin working in India.

The scheme leverages NEFT ecosystem available in the country for origination of such remittances and entails a ceiling of Rs 50,000 per remittance with a maximum of 12 remittances in a year.

The beneficiary receives funds in Nepalese Rupees through credit to her/ his bank account maintained with the subsidiary of State Bank of India in Nepal (Nepal SBI Bank Limited) or through an agency arrangement.

The enhancements to Indo-Nepal remittance facility scheme are expected to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal.



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Indo-Nepal Remittance Facility: RBI enhances transaction ceiling 4-fold to ₹2 lakh

Banking & Finance

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The Reserve Bank of India has made enhancements to the Indo-Nepal Remittance Facility Scheme, whereby the ceiling per transaction has been increased four-fold to ₹2 lakh and the cap of 12 remittances in a year per remitter has been removed.

Theenhancements, which come into effect from October 1, 2021, have been announced to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal, RBI said in a circular to all banks participating in the National Electronic Funds Transfer facility.

Under the scheme, the beneficiary receives funds in Nepalese Rupees through credit to her / his bank account maintained with the subsidiary of State Bank of India (SBI) in Nepal, — Nepal SBI Bank Ltd (NSBL) or through an agency arrangement.

RBI said hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances.

The central bank asked banks to put in place suitable velocity checks and other risk mitigation procedures.

RBI emphasised that “the enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.”

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Fall in outward remittances good news for India’s current account, BFSI News, ET BFSI

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India’s outward remittances fell by as much as $6 billion in FY21 as the pandemic put brakes on ordinary overseas travel and student traffic to campuses abroad, partly contributing to the current account surplus of $24 billion.

This is the first time annual remittance outflows contracted since 2015 when the Reserve Bank of India (RBI) doubled the annual limit for sending money abroad to $250,000 and allowed more current account transactions under the Liberalised Remittance Scheme (LRS).

Total outflows contracted 32% in FY21 as major heads like travel, overseas studies and maintenance of close relatives saw a sharp dip. But outflows under permissible capital account transactions like investment in overseas deposits picked up.

“The fall is largely due to complete restrictions on travel. Nil MICE (meetings & incentive) movements, and there are no trade fairs and exhibitions due to Covid,” said Harsh Kumar Bhanwala, executive chairman of Capital India Finance, which makes outward remittances under the RemitX brand.

Curbs on leisure travel contributed to this trend while outbound student traffic was almost nil last year as overseas universities moved online to check the spread of the pandemic, Bhanwala said.

Outward remittances fell to $12.7 billion during FY21, from $18.7 billion in FY20, RBI data showed. Under the LRS started in 2004, all resident individuals, including minors, are allowed to remit up to $250,000 per financial year for any permissible current or capital account transaction or a combination of both.

These include private visits to any country (except Nepal and Bhutan), gift or donation, going abroad for employment, emigration, maintenance of close relatives abroad, travel for business, or for meeting medical expenses, or for studies abroad or any other current account transaction which is not covered under the definition of current account in FEMA 1999.

Two heads — travel and remittance for studies abroad – accounted for about 56% of outward remittance during the year as the pandemic induced lockdown globally even restricted essential travel forcing students to defer their travel plans for overseas studies. While travel outgo dipped 53% to $3.2 billion, expenses for studies abroad dipped 23% to $3.8 billion during the year.

Significantly, capital account transactions like resident individual investments in overseas financial markets rose during the year, albeit on a small base, with investors likely eying the combined benefit of rising yields and dollar strength over a period of time. Investment in overseas equity and debt rose 9.4 per cent to $472 million and investment in overseas deposits rose per 9.1 cent to $680.4 million.



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