Why Did Central Bank Reduce Transaction Limit for Domestic Remittance?

Fri, Mar 4, 2022 11:15 AM on Economy, National, Latest,

The central bank has set a domestic remittance transaction limit of Rs. 25,000 per day.

Issuing a notice dated Falgun 18, the central bank has stated that licensed remittance companies, their sub-agents, and sub-representatives can process domestic remittance only of Rs. 25,000 per day per client. Previously, the limit was Rs. 1,00,000 per day.

The notice has clarified that while the limit for domestic remittance has changed, no alterations have been to the existing rule regarding international remittance.

Narayan Prasad Pokhrel, Deputy Spokesperson & Information Officer at NRB informed Sharesansar that the central bank wants to discourage the use of remittance intermediaries at the national level. "In all honesty," Pokhrel said, "Banks and financial institutions have become capable enough to process fund transfers across the nation. Hence, the central bank wants to eliminate the need for remittance intermediaries that often charge higher transaction fees for the clients."

When asked why Nepal Rastra Bank did not decide to eliminate the local remittance channels immediately, Pokhrel replied that the central bank did not want to introduce an abrupt change in the ongoing system, and wanted to smoothen the transition.