Notice regarding transfer of foreign currency into Nepal through online financial services for E-commerce business.

Nepal Rastra Bank’s Payment System Department has published a notice on 17 September 2020 informing licensed banks and financial institutions, payment system operators, payment service providers and concerned persons regarding the transfer of foreign currency from foreign countries into Nepal through online financial services for online earnings and e-commerce business.

The key provisions of the notice are set out below:

a) The notice provides the validity to the proceeds received from following sources:

• Export and sale of expertise/skills related to information technology;
• Content posted on social media; and
• Retail international business/trade transactions.

b) After the receipt of foreign currency into the local bank account, a payment service provider (including banks and financial institutions) will be able to transfer the amount into the customer’s wallet and other payment instruments in local currency till the prescribed limit.

c) The payment of the royalties and other fees to be made to foreign countries in course of generating aforementioned proceeds must be made in accordance with the directions prescribed by the Foreign Exchange Management Department.

d) Laws relating to the prevention of financial investment in money laundering and terrorist activities as well as other prevailing acts, laws and regulations must be mandatorily followed.

e) The monthly details of the transactions through this medium must be provided to the Payment System Department in the prescribed format within fifteen (15) days of the end of every month.

Before the issuance of the notice, entrepreneurs and users earning from online platforms such as Youtube, Instagram, Facebook, Spotify and other online sites had to use an international payment gateway such as Western Union as the government had prohibited to receive online earnings from third party sources. The incorporation of online financial transaction by Nepal Rastra Bank in the legal banking system provides facilities to receive income from abroad in foreign currency that can be converted to Nepalese Rupees within the legal banking perimeter in Nepal.

The official notice can be accessed through this link:

https://www.nrb.org.np/contents/uploads/2020/09/eCommerce_Related_Notice_20770601.pdf.