February 11, 2020, Kathmandu
Rastra Bank has finally called for action to be taken on Facebook, YouTube, and other social networks, warning them to abide by formal payment methods. Claiming that foreign currency was mismanaged through the payment of advertisement, the stakeholders were claiming that the Rastra Bank issued warning without making clear legal arrangements immediately after the payment was stopped.
Binod Dhakal, former president of CAN Federation, said that trying to bring the payment of advertising on social networks into the banking system was a good move but the problem exists in the lack of procedures. “There is no problem with payment on social networks through the banking system,” he said, “but the Rastra Bank should give the policy path as soon as possible.”
Chief of the Foreign Exchange Management Department of the Rastra Bank, Bam Bahadur Mishra, said that payment of social networks is about to be brought into the formal system. “The NRB has been informed that there is a lot of foreign currency mismanagement by advertising on social networks,” he said, adding that the Rastra Bank is working to bring such business into the formal system. Stating that discussions were also underway with the stakeholders, he informed that instructions could be issued in 10/15 days about the legal procedures.
Nepal Rastra Bank last week warned of action that might be taken for unauthorized payments for advertising on Facebook, YouTube, Google, and social networks and the Internet. NRB estimates that Nepalese communities advertise on Facebook and YouTube and send money through relatives or foreign companies abroad to promote the business in Nepal through social media, which is an unauthorized payment system.
Rastra Bank has warned that if anyone is found to be doing business in such a manner, then it will take action in accordance with the Foreign Exchange Act and prevailing laws. The Foreign Exchange Act provides for the seizure of transactions of foreign exchange without the permission of the government body and may impose up to three times the fine. The Act provides for fines of up to two lakhs in case of negligence business, depending on the amount of offense.
Since there is no systematic ‘payment gateway’ for transactions on social networks, most advertisers are making payments through informal means. Following the directive, Nepalese who make money by making videos on social networks like Facebook and YouTube will also have to take their money through the banking system. YouTube places a certain percentage of video creators available for advertising on such videos. According to Misbah, the head of the Foreign Exchange Management Department of the National Bank, it has been reported that most of the money has been deposited in the accounts of relatives and friends abroad and brought to Nepal through informal means. “Nepalese youths working in information technology are getting large amounts of money every day living in the country,” he said, adding that the money does not come from the banking system. The number of people who pay for advertising on social networks through the permission of the regulatory body of Nepal is very small. From ekantipur online