In order to facilitate the payment against purchase of goods and services through online, Nepal Rastra Bank, vide its circular dated 21 March 2021, has authorized commercial banks and national level development banks to issue foreign currency prepaid cards of USD 500 or equivalent foreign currency.

There are some conditions that needs to be complied while issuing/using such prepaid cards.

• Any person, firm, company, or organization willing to get a prepaid card on foreign currency can get it by converting their bank balance in NPR to the foreign currency from the banks. For issuing this card, users must have updated their Know Your Customer (KYC) from the respective banks and should have a Permanent Account Number (PAN).
• The Banks can load the funds in the name of users of such cards to the extent of USD 500 or equivalent foreign currency.
• The users can use such amount of USD 500 at once or at the time intervals over the period of one year. The period of one year shall be counted from the date the Card is issued and activated.
• The users can purchase the legally unrestricted goods and services online from abroad using such cards.
• If the card user has income in foreign currency from the export of services online, then they shall make arrangement of depositing their export income in the card. If requested by the user, arrangement shall be made for depositing their export income in their NPR account or foreign currency account in the bank. However if the balance of the card exceeds USD 5,000 or equivalent foreign currency, the amount in excess of USD 5,000 or equivalent foreign currency must be deposited in their NPR or Forex account in the bank.
• In case the card user has no such income in foreign currency, the bank cannot load amount in excess of USD 500 or equivalent foreign currency in the card.
• If the card user has foreign currency income from export of services, then the limit of foreign currency that can be expensed by them for purchase of goods and services shall be equivalent to USD 500 plus their foreign currency income. However in any case, this limit shall not exceed USD 5,000 or equivalent foreign currency per year.
• The person willing to take such prepaid card shall have to self-declare that he has not availed such facility from other banks.
• If the users avail such facility from more than one bank, such users are liable for penalty as per Foreign Exchange Regulation Act. Also, the users are obliged to comply with the prevailing applicable laws, regulations, and directions including Money Laundering Prevention Act, 2064 (2008 AD).
• The cards shall be used only for online purchase of goods and services and shall not be used for capital transactions. Further, such cards cannot be used for drawing cash from ATM and transact through POS.

Reanda Biz Serve Comments

The arrangement of facility of Foreign Currency Exchange for Import of Foreign goods and services Online is a commendable step by Nepal Rastra Bank. This will ease out the online payment of foreign currency on the purchase of necessary goods and services for the needy users. Further allowing the users to bring their foreign currency income from export of services will ultimately increase the inflow of foreign currency that has remained blocked outside Nepal.

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