August 26: Nepal Rastra Bank has authorised Nepal Clearing House Limited (NCHL) to prepare a national payment switch at a time when the country is struggling for affordable and safe electronic transaction due to lack of such switch.
The central bank assigned the job to NCHL about a month ago. NCHL has already started feasibility study for establishing the national payment gateway.
Chief Executive of NCHL Nilesh Man Singh Pradhan says they will discuss about the modality of the payment switch after the feasibility study gets completed.
Banks and financial institutions (BFIs) have been paying hefty price for digital transaction through international payment gateway like Visa and MasterCard due to lack of Nepal’s own payment gateway. The switch is crucial for connecting all the institutions involved in electronic transaction.
Currently, banks have been relying on international switch for the payment through debit and credit cards as well as for the use of ATMs. Some banks have made their own switch for this purpose.
Nepal Rastra Bank has been paying Rs 12 per transaction to the operators of foreign switch, according to NRB Spokesperson Gunakar Bhatta.
Nepal Rastra Bank had prepared a report on the National Payment Gateway in April.
NRB had formed a five-member committee headed by Subash Ghimire, director of the Payments System Department, to prepare the report after the finance ministry instructed the central bank to establish a national switch for electronic payment through banks.
A representative each from the finance ministry, Financial Comptroller General’s Office, Information Technology Centre and Nepal Bankers’ Association were the members of the committee.
The report had provided various suggestions to the central bank regarding the operation process of the payment gateway.
The national switch of NRB will incorporate revenue collection and payment of the government in the first phase.
In the second phase, the central bank plans to bring all the payments across the country under a single channel.
