Nepal Rastra Bank Extends Deadline for Remittance Companies to Meet Capital Requirements

Kathmandu. Nepal Rastra Bank has extended the deadline for remittance companies to meet their minimum paid-up capital requirements by two years. Through the 'Remittance Regulations, 2079 (Second Amendment)', a new provision has been introduced requiring remittance companies to reach a minimum paid-up capital of 100 million rupees by the end of Ashar 2087.

Previously, this capital requirement was mandated to be met by the end of Ashar 2085. The central bank had previously issued directives for phased capital increases, which included targets of 30 million by 2081, 40 million by 2082, 60 million by 2083, 80 million by 2084, and 100 million by 2085. However, with the new amendment, these interim targets have been removed, and a direct provision has been set to reach 100 million in capital by 2087.

The central bank has also introduced measures to further streamline remittance operations. The amendment clarifies procedures for licensing, renewal, suspension, and cancellation of remittance businesses, as well as provisions regarding offenses, penalties, and the process for mergers and acquisitions of companies.

Under the new arrangements, remittance companies, with the approval of the central bank, can operate as payment service providers or payment system operators through subsidiary companies. Additionally, they are permitted to issue remittance cards and perform other functions specified by the central bank. Banks and financial institutions have also been granted permission to conduct remittance business.

To obtain a license, a remittance company must maintain a minimum paid-up capital of 250 million rupees, while other companies are required to have a minimum capital of 100 million rupees.