Nepal Rastra Bank Reduces ATM Transaction Limit to Promote Digital Payments

13th October 2025, Kathmandu

In a landmark move designed to aggressively push the nation toward a digital economy, the Nepal Rastra Bank (NRB), the country’s central monetary authority, has announced significant reductions in the maximum daily and monthly withdrawal limits for Automated Teller Machines (ATMs).

NRB ATM Limit Reduced

This new directive, which modifies the operational guidelines for all licensed banks and financial institutions (BFIs), is effective immediately and signals a robust commitment to reducing dependency on cash and accelerating the adoption of electronic payment systems across Nepal.

The Strategic Shift: New ATM Withdrawal Limits

The user-provided information, which aligns with the central bank’s ongoing policy to promote digital transactions (as evidenced by continuous regulatory updates and push for electronic payment systems by NRB), details the specific new constraints placed on cash withdrawals via debit, credit, and prepaid cards. The stated revisions represent a decisive step away from traditional cash transactions, essentially making large, frequent ATM withdrawals less convenient for consumers and businesses.

• The revised ATM cash withdrawal limits are as follows:
• Per Transaction Limit: Set at a maximum of NPR 20,000.
• Daily Withdrawal Limit: Sharply reduced from the previous limit of NPR 100,000 to NPR 50,000. This cut of 50% is the most impactful change aimed at immediate behavioral adjustment.
• Monthly Withdrawal Limit: Decreased from NPR 400,000 to NPR 300,000.

Previously, customers were accustomed to withdrawing up to NPR 25,000 per single transaction. This significant tightening of the cash withdrawal taps is a calculated regulatory tool to channel consumer and commercial activity toward digital alternatives such as mobile banking, QR code payments, and online fund transfers. The central bank views this as a crucial step in formalizing the economy, enhancing financial transparency, and mitigating the risks associated with handling large amounts of physical currency.

NRB’s Vision: The Digital Ecosystem Push

The overarching goal of the Nepal Rastra Bank, as reaffirmed by this directive, is to foster a secure, efficient, and resilient National Payment System (NPS). For years, the NRB’s Payment Systems Department has been actively formulating policies to promote digital payment infrastructure and adoption. This is part of a broader “Digital Nepal Framework” and “Financial Inclusion Strategy” aimed at ensuring that the benefits of technological advancements reach all segments of society, including those in remote areas.

By implementing tighter ATM controls, the NRB is, in effect, creating an incentive structure that favors digital methods. When a large cash withdrawal becomes cumbersome, users are prompted to explore more convenient digital channels. The recent years have already shown a massive surge in digital payment adoption, with QR code transactions witnessing exponential growth. This growth is a clear indicator that the Nepalese public is increasingly comfortable with digital solutions like:

• Mobile Banking and Internet Banking: Allowing for instant, round-the-clock fund transfers and bill payments.
• E-Wallets (PSPs): Digital platforms like eSewa and Khalti have become ubiquitous for Person-to-Person (P2P) and Person-to-Merchant (P2M) payments, significantly minimizing the need for physical cash, especially in retail transactions.
• ConnectIPS and other Faster Payment Systems: Facilitating high-value, instant inter-bank fund settlements for both individuals and businesses.

Data suggests that the growth rate of ATM usage had already begun to slow down prior to this directive, a trend that NRB officials have cited as evidence of a “healthy adoption of QR code payment systems.” This new, stricter limit on cash withdrawals is expected to accelerate this existing momentum, further eroding the reliance on physical cards and cash in favor of mobile-centric and instant-pay solutions.

Impact on Financial Inclusion and Economic Transparency

The move is not solely about convenience; it carries profound implications for financial inclusion and the formalization of Nepal’s economy.

Enhancing Traceability and Transparency: Digital transactions leave an electronic trail, which significantly improves financial transparency and aids in the central bank’s efforts to combat money laundering and tax evasion. By moving a greater volume of transactions from the informal, cash-based sector to the formal digital channels, the central bank strengthens the overall integrity of the financial system.

Reducing Operational Costs: For banks and financial institutions, operating and maintaining an extensive network of ATMs and handling large amounts of cash is a considerable expense. The shift to digital payments reduces these logistical and operational costs, which can then be channeled into developing better digital infrastructure and services.

Promoting Access in Rural Areas: While digital literacy and internet infrastructure remain challenges in remote parts of Nepal, the long-term strategy involves making digital platforms the primary access point for financial services. This strategy is more sustainable for reaching scattered populations than building and servicing physical ATM networks. The push for digital literacy and infrastructure improvements, identified as critical by recent studies, will likely gain even more urgency following this new directive.

Addressing Consumer Adjustments and Future Outlook

While the new limits necessitate a shift in consumer behavior, they align Nepal with global trends where central banks often utilize transaction limits to discourage cash usage in favor of faster, more secure electronic payments. Consumers accustomed to a certain level of daily cash access will now be compelled to integrate mobile and internet banking services more fully into their daily routines for transactions exceeding NPR 50,000.

The implementation of the new directive, issued in alignment with the ongoing regulatory framework (such as amendments to the Unified Directives, 2081), will be closely monitored. The NRB’s continuous focus on both improving payment system stability and promoting digital adoption suggests that future policies will likely continue to support the expansion of digital alternatives to make the reduced ATM limits a non-issue for the majority of daily consumer transactions. The ultimate success of this measure will be measured by the rate at which cash transactions decline and the overall value and volume of digital payments rise in the coming fiscal year.

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