The Reserve Bank of India raised the limit on remittances from India to Nepal from Rs 50,000 to Rs 2 lakh on Friday. Thus, making it easier for ex-servicemen living in the neighboring nation to receive retirement and pension payments. Furthermore, the central bank has lifted the 12-remittance limit per remitter every year.
In a circular, the Reserve Bank of India (RBI) stated, “Banks will continue to accept cash payments must how it was in the past. The bank accepts remittance payments from all walk-in clients and non-customers. However, the Rs 50,000 per remittance limit, will remain in effect for such remittances. The Rs. 5000 payment limit also has a maximum limit of 12 remittances per year”. In addition to raising the ceiling, the RBI has recommended banks implement appropriate velocity checks and risk mitigation procedures.
The modification of the remittance policies aims to facilitate the remittance payment or cash transfer from India to Nepal easier. This policy also focuses on the pension and other payments to our ex-servicemen who have settled/ resettled in Nepal easier. The circular addresses all NEFT (National Electronic Funds Transfer) banks’ Chairman, Managing Director, and Chief Executive Officers.
What is Indo-Nepal Remittance Facility Scheme?
The RBI created the Indo-Nepal Enclosure Facility Scheme in May 2008. The scheme provides an option for cross-border remittances from India to Nepal. It was envisaged with a special focus on the needs of Nepali migrant workers working in India.
The scheme makes use of the country’s NEFT ecosystem to facilitate the origination of such payments. Albeit with a limit of Rs 50,000 per enclosure and a maximum of 12 enclosures per year. The beneficiary receives funds in Nepalese Rupees via credit to her or his bank account with Nepal SBI Bank Limited (a subsidiary of State Bank of India), or through an agency arrangement.
The modifications to the Indo-Nepal transmittal facility scheme are intended to increase trade payments between the two nations. Moreover, it will also boost and make electronic transfers to Nepal easier. For more such updates, keep watching this space!