The Indo-Nepal Remittance Facility Scheme was introduced in May 2008 by the Reserve Bank of India, jointly with Nepal Rastra Bank, to provide an avenue to migrant workers of Nepalese origin working in India to remit funds at regular intervals in a safe and cost-efficient manner to their families in Nepal.
Reserve Bank on Friday hiked the ceiling on remittances per transaction from India to Nepal to Rs 2 lakh from Rs 50,000. The move will be expected to boost trade payments between the two countries, it said. Besides, the facility is expected to help; retirement and pension-related payments to ex-servicemen settled/relocated in Nepal after their retirement. The central bank has removed the cap of 12 remittances in a year per remitter. While increasing the ceiling, RBI has also advised banks to put in place suitable velocity checks and other risk mitigation procedures.
Till now, banks were accepting remittances by way of cash from walk-in customers or non-customers. The ceiling of Rs.50,000 per remittance with a maximum of 12 remittances in a year as hitherto for such remittance from walk-in customers or non-customers shall continue without any modification in the rules.
For NEFT transaction:
The Scheme leverages the National Electronic Funds Transfer (NEFT) ecosystem available in the country for the origination of such remittances and entails a ceiling of Rs.50,000 per remittance with a maximum of 12 remittances in a year.
A non-customer remitter has to submit documents for proof of identification such as Passport / Permanent Account Number / Driving License / Telephone Bill / Certificate of Identification issued by his employer with photograph and other details. The information will be captured in the NEFT system as part of compliance with the Know Your Customer (KYC) requirements. Complete address and telephone/mobile number of the beneficiary in Nepal will also be required. The beneficiary receives funds in Nepalese Rupees through credit to her / his bank account maintained with the subsidiary of State Bank of India (SBI) in Nepal, i.e., Nepal SBI Bank Limited (NSBL) or through an agency arrangement.
The charges for transactions up to Rs.50,000 shall continue as provided in RBI circular DPSS (CO) No.1381/04.09.003/2008-09 dated February 09, 2009. As per the circular, the originating bank branch in India charges a maximum of Rs. 5 per transaction.
State Bank of India in India charges Rs. 20 per transaction if the beneficiary maintains an account with Nepal SBI Ltd. (NSBL). State Bank of India shares this amount equally with NSBL. NSBL would not charge any additional amount for crediting the account of the beneficiary. In case the beneficiary does not maintain an account with NSBL, an additional amount of Rs.50 would be charged for remittances up to Rs. 5,000 and Rs. 75 for remittances above Rs. 5,000.
The charges would, thus, be a minimum of Rs. 25 or a maximum of Rs. 100 depending on the value of the transaction and the manner in which credit is afforded to the beneficiary. For transactions beyond Rs.50,000, the charges prescribed by SBI shall apply.