5th June 2023, Kathmandu
In a significant development, NPCI International Payments Limited (NIPL) and Nepal Clearing House Limited (NCHL) have signed a memorandum of understanding (MoU) to facilitate cross-border digital payments between India and Nepal.
This partnership aims to integrate India’s Unified Payments Interface (UPI) and Nepal’s National Payments Interface (NPI) to enable seamless fund transfers and merchant payments between the two countries.
The MoU was exchanged between Mr. Ritesh Shukla, CEO of NIPL, and Mr. Neelesh Man Singh Pradhan, CEO of NCHL, in the presence of H.E. Narendra Modi, Prime Minister of India, and H.E. Pushpa Kamal Dahal ‘Prachanda’, Prime Minister of Nepal during his state visit to India.
The collaboration seeks to establish cross-border connectivity for financial transactions, benefiting various user groups such as students, pilgrims, and travelers. Initially, the focus will be on inward and outward transfers between banks in India and Nepal.
This will be achieved through the integration of UPI and NPI, leveraging the existing infrastructure for cross-border transactions, with future plans to extend the system for merchant payments.
The integration of UPI, renowned for its scalability and advanced payment capabilities, is also expected to enhance Nepal’s payment systems.
As part of the MoU, NCHL, and NIPL will work together to establish technical integration, legal and compliance structures, and business aspects related to cross-border transactions. For each specific use case, definitive agreements will be entered into between the entities. Transaction limits, fees, and other control measures will be implemented in consultation with the respective central banks and after obtaining the necessary approvals.
NPCI International Payments Limited (NIPL), a subsidiary of the National Payments Corporation of India (NPCI), is dedicated to revolutionizing global payments through technology and innovation.
NPCI formed through a collaborative effort of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), aims to establish a robust digital payment and settlement infrastructure in India. Meanwhile, NCHL, established under the leadership of Nepal Rastra Bank (The Central Bank of Nepal), operates multiple national payments, clearing, and settlement systems in Nepal, including the recently launched Retail Payment Switch (RPS) under the National Payment Switch (NPS) framework.
NCHL is also involved in implementing a domestic card scheme called NEPALPAY as part of the NPS.
This collaboration between NPCI and NCHL is a significant milestone in the region, as it aims to interconnect the real-time retail payment systems of India and Nepal, enabling seamless cross-border payments.
