Explained: Indo–Nepal Remittance Scheme (INRF Scheme)

Nepal Remittance Scheme (INRF Scheme) was launched by the Reserve Bank of India (RBI) in May 2008 to provide a safe and cost-efficient avenue for migrant Nepalese workers in India to remit money back to their families in Nepal. In August 2021, the Scheme was improved to boost the trade payments between the two countries, and to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled/relocated in Nepal.

Under the above scheme, one can remit up to ₹2 lakhs per transaction to the beneficiary residing in Nepal; provided the sender maintains an account with any NEFT-enabled bank branch in India. Walk-in / Non-customer can remit up to ₹50,000 per transaction to Nepal residing beneficiary. However, there is no limit on remittances if the sender is maintaining an account with any NEFT-enabled branch in India. Walk-in / Non-customers are allowed to remit 12 remittances in a year with a ceiling of ₹50,000 per remittance.

It is convenient to remitter and beneficiaries if the beneficiary maintains a bank account in Nepal to credit the remittance from India. However, the beneficiary need not mandatorily maintain a bank account in Nepal to credit the money to his account. In Nepal, the INRF Scheme is handled by Nepal SBI Ltd. (NSBL). If the beneficiary does not have a bank account with NSBL or resides in a locality/area in Nepal not serviced by an NSBL bank branch, an arrangement has been entered into by NSBL with a money transfer company in Nepal (called Prabhu Money Transfer) who would make arrangements for delivery of cash (in Nepalese Rupees) to the beneficiary.

How it works?

The originating bank branch in India adapts normal process of NEFT transfers used in India. The only difference is that these transactions will subsequently be pooled/collected at the designated branch of the State Bank of India (SBI) in India. At the end of the day, the remittance information is conveyed electronically by SBI in a secure mode to NSBL. NSBL then makes arrangements for credit to the bank account of the beneficiary if the beneficiary is an account holder of NSBL. Else, NSBL disburses funds in cash to the beneficiary through the authorised money transfer company (Prabhu Money Transfer). The beneficiary has to approach the local branch of the money transfer company, furnish the UTR number (also called the Unique Transaction Reference number that uniquely identifies a transaction in the NEFT system that can be obtained from the remitter), and produce a photo identity document (generally Nepal Citizenship Certificate) to prove his identity. If the beneficiary does not approach the money transfer company within a week from the date of the transaction, the money transfer company will make arrangements for the return of the remittance to the originator.

Documents required for money transfer:

In the case of the remitting customer maintaining an account with a bank branch in India, there is no need for any additional information, documents, or identification. Otherwise, the remitter has to submit documents for proof of identification such as a Passport / Permanent Account Number / Driving License / Telephone Bill / Certificate of Identification issued by his employer with a photograph and other details. The information will be captured in the NEFT system as part of compliance with Know Your Customer (KYC) requirements. The complete address and telephone / mobile number of the beneficiary in Nepal will also be required.

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