September 24: Billions of rupees have been entering Nepal through unofficial channels for E-commerce. There hasn’t been any definitive data on it. The number of people generating revenue through online portals like YouTube, Facebook, Google, etc. have also been increasing. Due to the hassles in sending money to Nepal from abroad, Nepali citizens living in foreign countries have been saving money with PayPal and then spending it abroad.
But now, Nepal Rastra Bank has made arrangements to transfer foreign currency to Nepal through online financial services. Bankers believe that this provision will make it easier for foreign currencies to enter Nepal.
Nepal Rastra Bank has stated that the revenue from the sales of information technology expertise, posting of contents on social media and from the retail-level international business and commercial transactions can be brought to Nepal through the banking system. The payment service provider or the bank and financial institution can make the arrangements to transfer the money in domestic currency to the customer’s wallet or any other payment gateways after the local bank receives the amount in their account. BFIs will be liable to charge the fees or other charges as fixed by the Foreign Exchange Management Department of Nepal Rastra Bank for earning the foreign currency.
Anyone can earn foreign currency in compliance with the Act on Prevention of Investment in Money Laundering and Terrorist Activities along with other related prevailing acts, laws and directives.
The Payments System Department of the central bank claims that the money received from foreign countries can be legally transferred directly to Nepalese banks through the use of various online payment services. Bhuwan Kadel, the executive director of the Payments System Department said that bringing such transactions under the banking system will help in the conversion of foreign currencies into Nepalese rupees. “It also legalizes online ordering and payments,” he told New Business Age, adding, “In conclusion, the revenue can enter Nepal through the use of online payment services like Visa Card, PayPal, etc. Similarly, payment services like Esewa, Khalti, IME Pay can also be used to transfer the money earned through E-commerce in the account or wallet of the concerned person.” He said that the central bank has created an environment which will even allow the money withheld abroad to enter the financial system of Nepal.
Nepal Rastra Bank maintained that it is illegal to send and receive payments abroad through informal channels. Payments for advertisements on social media is done in dollars. There isn’t any facility for dollar exchange or payment through Nepalese medium for such work. So, Nepalese businesses, firms and organizations have been using foreign mediums too make payments for advertisements on social media. Therefore, there are no data for the amount that exits Nepal through foreign payment mediums.
Balkrishna Joshi of Thamel Remit claims that thousands of softwares are being sold through freelancing from Nepal. “Most people work for at least 50 to 200 dollars but it is expensive to transfer it to Nepal. For the minimum amount sent by a foreign company, the service fee is more than 45 dollars. This way most of them keep their money in Payoneer Internet Wallet,” he said, “They make the necessary payments to different apps through it. The money therefore, is usually spent outside Nepal before entering. There are people who earn 3-4 thousand dollars monthly through their IT services given from Nepal. In this way, billions of rupees have entered Nepal illegally every year.”
Joshi said that the foreign currencies earned through E-commerce can enter through Nepalese system if the government encourages a formal channel for the transfer of money. He believes that this will also help in increasing the revenue collection of the nation.
Bhuwan Dahal, the chairman of Nepal Bankers’ Association, said that this arrangement made by the central bank is a welcome step.