Kathmandu, August 16
Nepal Clearing House Ltd (NCHL) will bring interbank payment system into operation on Wednesday (August 17) to expedite fund transfer between bank accounts of individuals, businesses and the government.
NHCL, a public company established jointly by Nepal Rastra Bank, banks and financial institutions, among others, is introducing three products to commence the operation of the payment platform.
One product NHCL is launching on Wednesday is customer transfer, which enables fund transfer between bank accounts of individuals and businesses within a few hours. Another is treasury product which enables bulk transfer of funds between financial institutions. The third product is government payment, which enables fund transfer between government and businesses, such as a government ministry and contractor hired to build a physical infrastructure.
“These payment services will currently be available within a network of 58 banks and financial institutions, of which 26 are commercial banks, another 26 are development banks and six are finance companies,” NCHL CEO Neelesh Man Singh Pradhan said.
At present, customers will have to rely on offline facility to transfer funds from account of one bank to that of another bank located within country.
This means customers will have to walk into the office of a bank or a financial institution where they have an account, fill up a form and ask the teller to transfer the amount.
In a similar manner, private firms and government agencies can also instruct their banks to transfer funds to beneficiaries’ accounts located in different banks and financial institutions, reducing the use of cheques. This facility can also end the practice of opening bank accounts in multiple banking institutions just for the sake of facilitating fund transfer process.
Currently, for instance, private firms and government agencies ask their employees to open salary accounts in the same bank where they have an account to ease fund transfer process.
“But once new system comes into operation, such procedure need not be followed, as funds can be transferred from employers’ account to employees’ accounts located in any bank and financial institution in a few hours,” Pradhan had told The Himalayan Times earlier.
Another benefit of new system is the option it provides to accountholders to issue direct debit instructions to transfer certain amount from their accounts on a periodic basis. This feature will help people who have to deposit certain fee, like insurance premium, or make other payments on a certain day every month.
Yet, these types of fund transfer services are not new. However, banks and financial institutions are using different systems to make different types of payments, and the entire process can be cumbersome at times.
“The new system will enable banks and financial institutions to make various types of payments through a single gateway,” Pradhan said. In other words, banking institutions will not have to rely on one system to make remittance payment and another to settle corporate payments.
NCHL has said it will make fund transfer services available for a fee of two rupees to Rs 100, depending on the nature of the fund transfer product and volume of amount that is being transferred.
NCHL has also said it will allow individual clients to transfer up to Rs 10 million at a time. This ceiling also applies for firms transferring employee salaries. Ceiling has been fixed at Rs 200 million for payments related to businesses and government.
A version of this article appears in print on August 17, 2016 of The Himalayan Times.