Digital wallet apps to be regulated by the Government; Government proposes new Act

Government of Nepal has proposed to discard Section 103 of Nepal Rastra Bank Act 2058 and to implement a new Act as replacement. Section 103 deals with the payment, clearing and settlement which will be regulated by the new proposed Act.

The proposed Act will act as a regulation for the payment service providers as well as all the digital payment apps. The implementation of the Act will regulate all the digital wallet apps like Esewa, Khalti, QPay etc.

The Act has proposed the establishment of ‘National Payment Board’ under the chairmanship of Governor of Nepal Rastra Bank. The board will act as the regulatory body for the payment service providers and will prepare and implement various rules and policies.

With the implementation of this Act, new companies desirous to be involved in the payment services shall take prior approval from the Country for establishment. However, Banks and financial institutions need not take any kind of permission to provide such services.

In order to receive the license of payment service provider, an intent letter should be provided to the Rastra Bank. The license issued through such method shall be valid for 5 years. Any company involving in the payment services without approval of the government shall be punishable. Any kind of activities performed contrary to the Act shall be jailed 5 to 10 years or fine of Rs 1 crore or both.