NRB Payment Systems Directive Imposes Strict Rules on PSPs
3rd June 2026, Kathmandu
NRB has heavily amended and expanded its highly authoritative Integrated Directive on Payment Systems.
NRB Payment Systems Directive
This sweeping regulatory update specifically targets licensed payment related institutions while excluding standard commercial banks and financial institutions.
The heavily revised provisions have been implemented immediately by the active Payment Systems Department of NRB. This regulatory action was executed under the clear legal authority granted by Section 45 of the Payment and Settlement Act, 2019. The sudden move marks a massive shift in how fintech companies must operate moving forward.
The newly deployed directive introduces exceptionally strict transparency and compliance requirements for individuals. It places a massive spotlight on anyone involved in the direct ownership, management, and daily operation of Payment Service Providers and other licensed payment institutions. No corporate insider is exempt from this rigorous screening process.
Stricter Disclosure Requirements for Owners and Beneficiaries
Under the deeply revised provisions, payment institutions must now submit highly detailed background information to Nepal Rastra Bank. This rule applies to any individual who directly or indirectly owns, controls, participates in, or acts as the ultimate beneficial owner of the firm. The central bank is leaving no stone unturned in its quest to clean up fintech governance.
The central bank has specifically demanded absolute disclosure regarding any past or present involvement in financial crimes. This includes any link to illegal income generation or direct and indirect criminal activities. This aggressive tracking ensures that dirty capital cannot hide behind complex corporate structures or proxy shareholders.
Share Purchase and Management Appointments Under Scrutiny
The updated framework mandates that all digital payment institutions must formally notify the Payment Systems Department during major corporate events. This alert must be triggered whenever an individual acquires shares or capital investment exceeding 5 percent of the total paid up capital or a valuation of NPR 5 million.
Furthermore, immediate notification is required the exact moment a person is appointed or nominated as a director or senior management official. The same strict rule applies when an individual becomes a beneficial owner of shares or capital exceeding 5 percent or a threshold of NPR 2.5 million. The institution must submit complete details and heavy supporting documentation to the central bank in each specific case.
Mandatory Personal and Legal Declarations
The newly revised framework requires comprehensive personal disclosures that leave absolutely no room for corporate privacy. Every single concerned individual must submit their full name, permanent address, and extensive family details. They must also lay bare all background beneficial ownership information to prove where their funding originates.
Applicants must sign a formal self declaration confirming absolute compliance with applicable national laws and central bank regulatory standards. This declaration must explicitly disclose any criminal involvement inside Nepal or abroad. Individuals must list ongoing or past criminal cases, investigations, judicial proceedings, arbitration processes, or administrative actions alongside the final legal outcomes.
Advertisement
Revenue Liabilities and Loan Blacklist Information Required
According to the heavily amended directive, institutions are now legally obligated to provide detailed information on financial health and clean records. This includes reporting any outstanding government dues or unpaid taxes. Companies must also flag any court ordered financial liabilities that remain unresolved.
Regulators now require immediate disclosure if an individual is included in any loan default blacklists in Nepal or foreign jurisdictions. Potential conflicts of interest within Nepal or abroad must be clearly detailed. This strict disclosure requirement aims to significantly strengthen risk assessment and corporate governance standards within the rapidly expanding payment services sector.
Foreign Assets and Beneficial Ownership Disclosure
Nepali citizens associated with payment institutions face an extra layer of financial scrutiny under these new rules. They must explicitly declare whether they own assets outside the borders of Nepal. This includes declaring if they hold beneficial ownership in any foreign properties or offshore entities.
This specific provision is intended to enhance transparency regarding cross-border asset holdings and international financial interests. By tracking these external holdings, Nepal Rastra Bank can better monitor capital flight and enforce international anti money laundering standards across the entire financial technology industry.
Professional Background and Financial Conduct Assessment
The directive further requires the formal submission of detailed professional profiles for all key actors. Companies must submit previous work experience records showing every organization and institution the individual was associated with in the past. It must clearly outline the exact positions and responsibilities held during their career.
Regulators will closely examine historical awards, professional recognitions, and past disciplinary actions. Individuals must provide concrete examples of professional achievements alongside their financial conduct and behavioral records. These deep disclosures will help regulators assess the true suitability and ethical integrity of individuals steering these powerful licensed payment institutions.
Existing Officials Also Covered by New Rules
Nepal Rastra Bank has made it completely clear that these new standards do not just apply to future investors. The new compliance standards apply directly to individuals who were already associated with payment institutions before the implementation of this revised directive. This means current corporate executives cannot escape the new screening.
Licensed payment institutions are now required to retroactively collect and submit the prescribed information for all existing shareholders, directors, beneficial owners, and senior management personnel. All gathered data must be sent directly to the Payment Systems Department within the designated regulatory window to avoid heavy corporate fines or license suspension.
Conclusion
The latest amendment to the NRB Payment Systems Directive marks a turning point for financial technology transparency in Nepal. By forcing digital wallets and payment gateways to reveal the true identities and histories of their owners, the central bank is building a highly secure digital ecosystem.
While these strict guidelines will undoubtedly increase the administrative burden on payment service providers, the long term benefits are undeniable. This regulatory push will significantly boost compliance, protect consumer funds, and align the digital payment sector of Nepal with international financial security standards.
For More: NRB Payment Systems Directive
