Kathmandu, September 6
Nepal Rastra Bank is planning to raise the transaction limit for payment service providers (PSPs) under the Know Your Customer (KYC) compliance. The central bank has been drafting the unified directives based on the Payment and Settlement Bylaw, 2016, to regulate the online payment service providers at present.
PSPs have been registering clients on the basis of the mobile number and name of the account holder. The licensing policy for PSPs introduced some two-and-a-half months back sets a threshold of up to Rs 500 for one transaction and not exceeding Rs 5,000 in a month for an account holder. As per central bank officials, the threshold can be raised only under the full compliance of KYC for the account holders.
NRB has not yet decided the threshold of transaction under KYC compliance. As the PSPs have been providing services like airline tickets and others, upper limit of the transaction might be fixed accordingly.
“The central bank cannot rely on only the name and mobile number for transactions above Rs 5,000 per month,” one of the central bank officials said.
As the central bank has extended deadline till tomorrow for the PSPs already in operation to submit applications under the provision of PSP licensing policy, those who do not apply for the licence will not be allowed to operate their services. A PSP that uses telecommunication means and networks to provide service must meet the paid-up capital requirement of Rs 10 million. Those who have been providing services through cards will need to meet the paid-up capital requirement of Rs 50 million by the end of this fiscal, as per the licensing policy.
Currently, firms like eSewa, iPay and Hello Paisa have been providing service as PSPs. As per the central bank, those who do not apply for licence by tomorrow will not be eligible to provide services. The Payment and Settlement Department of the central bank has been framing the policies to bring PSPs under the regulation and supervision of the central bank.
PSPs will also be encouraged to provide services in rural areas where a large number of the population is deprived of banking services.
Most importantly, real time gross settlement is mandatory for PSPs. For instance, if a customer deposits Rs 500 to pay their electricity bill or for any other facility, the amount should be deposited in the settlement bank in the real time. The PSPs must work with banks and financial institutions for the settlement of the payments so that the non-banking institutions cannot hold a customer’s money for long.
Nepal Rastra Bank will cross-check the amount deposited to the account of PSPs at a particular time and the balance of the PSPs in the settlement bank of that time and can take action if PSPs are found not to be abiding by the rules.
The central bank has said that it will issue licence to the PSPs only after introducing the regulation. It has already started regulating the payment system operators and interbank payment system (IPS).
A version of this article appears in print on September 07, 2016 of The Himalayan Times.