The Nepal Rastra Bank (NRB), the central monetary authority, has introduced a new directive on electronic transaction, which bars credit cardholders from withdrawing more than 25 percent of credit limit in cash. At present, credit card users can exhaust the entire credit line by withdrawing cash.

The new directive has also barred credit cardholders, who have maxed out credit and cash withdrawal limit, from repaying the debt for the sole purpose of withdrawing cash again. Credit cardholders, according to the new directive, must wait until the payment deadline has expired to withdraw cash. This means if a credit cardholder with a credit line of, say, Rs100,000 has withdrawn Rs25,000 (25 percent) in cash and used the remaining Rs75,000 for electronic payments, then the person must wait until the expiry of payment deadline to withdraw cash again.

Credit cardholders are generally given a window of 15 days to make payments. If the credit card bill is issued on, say, April 25 and the payment deadline is, say, May 10, then credit cardholders, who have maxed out credit and cash withdrawal limit, cannot deposit the money in any one of the days between April 25 and May 10 and immediately withdraw cash. They have to wait until May 11 to withdraw cash again.

The new directive has also set transaction limits for prepaid and debit card users. It has also set transaction limits for users of electronic, digital or mobile wallets for the first time.

Users of electronic, digital or mobile wallets can top-up their accounts by up to Rs5,000 at one time through agents or sub-agents. But top-up limit has been set at Rs15,000 per day and Rs25,000 per month. Also, one-time spending limit on e-wallet has been set at up to Rs5,000. But spending limit on e-wallets have been set at Rs15,000 per day and Rs25,000 per month.

The new directive has also allowed people to transfer Rs100 to Rs5,000 per day or up to Rs15,000 per month from their bank accounts to e-wallets and from one e-wallet to the other. However, transfers of up to Rs50,000 can be made from bank accounts to e-wallets of service providers, like Nepal Telecom or Nepal Electricity Authority, to settle bills. However, the balance in e-wallet should not exceed Rs25,000, meaning extra amount that has been added to the e-wallet must be transferred to bank accounts.

People can also transfer funds from e-wallets to bank accounts, says the directive, without mentioning the fund transfer limit.

The NRB’s new directive has also set spending limits for mobile banking service users. These users cannot make payments in excess of Rs5,000 per transaction, Rs10,000 per day and Rs50,000 per month.

Internet banking service users, on the other hand, cannot make payments of more than Rs100,000 per day and Rs500,000 per month. Also, depositors can make online interbank transfers of up to Rs100,000 per day and up to Rs1 million per month.

Debit card users, meanwhile, can withdraw Rs500 to Rs25,000 at one time, but no more than Rs100,000 per day. However, banks and financial institutions can reduce cash withdrawal limit based on geographic condition, security situation and other special conditions, says the directive.

The directive has also said beneficiaries of remittance income should not be paid more than Rs100,000 in cash. Currently, remittance companies are allowed to release payments of up to Rs200,000 in cash to beneficiaries of remittance income. The remaining amount should be deposited in accounts of banks and financial institutions.

Provisions included in the latest directive should come into effect within mid-July, according to the NRB.

New directive on electronic transaction

• Credit cardholders barred from withdrawing over 25 percent of credit limit in cash
• One-time spending limit on e-wallet set at up to Rs5,000. Spending limit on e-wallets have been set at Rs15,000 per day and Rs25,000 per month 
• People can transfer Rs100 to Rs5,000 per day or up to Rs15,000 per month from their bank accounts to e-wallets and from one e-wallet to the other
• Transfers of up to Rs50,000 can be made from bank accounts to e-wallets of service providers, like Nepal Telecom or Nepal Electricity Authority 
• One-time payment limit on mobile banking service set at Rs5,000. People can make payments of up to Rs10,000 per day and Rs50,000 per month using mobile banking service
• Internet banking service users can make payments of up to Rs100,000 per day and Rs500,000 per month
• Depositors can make online interbank transfers of up to Rs100,000 per day and up to Rs1 million per month