NRB brings guideline for branchless banking
KATHMANDU,JUNE 22:
Nepal Rastra Bank (NRB) has allowed to undertake through branchless, mobile, internet and e-card banking along with defining their area of operation to encourage the e-banking for the expansion of banking services to the unbanked population.
“NRB has brought these comprehensive regulations for branchless and mobile banking to encourage more financial institutions to take up these services instead of focusing on opening more branches,” said spokesperson for NRB Bhaskar Mani Gyanwali. The directive does not ask financial institutions to provision additional capital to provide the services but NRB has asked them to take into account potential risks involved and ways to manage them.
NRB has referred to basic banking services being provided through the use of smart cards or magnetic cards through POS machines in remote locations as branchless banking. Customers are allowed to deposit, withdraw and transfer money to and from their accounts, but the limit on transaction has to be fixed by the financial institutions themselves.
However, NRB has forbidden banks to start branchless banking operations in metropolitans, sub-metropolitans and municipalities. “These areas are already crowded with branches so there is no need of branchless services there,” pointed out Gyanwali.
The central bank has allowed financial institutions of all classes to provide banking services using mobile devices through SMS or use of mobile banking platforms. But only class A, B and C financial institutions are permitted to provide internet banking and e-card banking services to their customers.
NRB has directed financial institutions to clearly state the distribution of liabilities and compensation of the customer, bank or value added service provider in case of certain losses due to shortcomings in the part of any of the players, in the agreement letter with the customers.
Earlier regulations for branchless banking by NRB were a basic 10-point directive which was not sufficient to cover all the aspects governing mobile and branchless banking. Central bank has asked all financial institutions that are providing these services to bring these services in line with the recently published regulation within the next three months.
Branchless banking has been recognised as an important model to increase banking access to people living in geographically difficult-to-reach places in Nepal. Everest Bank, Siddhartha Bank and Mega Bank use smart cards and agents to provide financial services to rural clientèle.
Kumari Bank’s Mobile Cash and Laxmi Bank’s Mobile Money use mobile network as a platform to allow banking transactions. Moreover, a multi-bank mobile banking portal –– Hello Paisa –– has also been launched that will allow mobile holders to transact through mobile phones even without a bank account.
Source: THT
