NRB issues rules for deals made with cards

KATHMANDU, AUG 29 - Nepal Rastra Bank (NRB) has fixed the pre-requisites for settlement of transactions made between Nepal and Bhutan through debit or credit cards in Indian currency as the monetary policy for the current fiscal year has allowed such dealings.

According to the latest circular of the central bank, such adjustment of transactions can only be carried out on the basis of written agreements between the concerned banks and financial institutions (BFIs) of the two countries.

“It is necessary to put up a bank guarantee or other security in the amount of the possible transactions as guided by the agreement between the two sides,” stated NRB’s circular.

Bhutanese BFIs can open nostro accounts (accounts in foreign banks) in Nepal as per their needs for this purpose.

“If the transactions have been made in other foreign currencies instead of Nepali or Indian currency, the settlement should be in US dollars,” stated the NRB circular.

A senior NRB official said that the move had been taken to ease transactions based on cards, especially for people of the two countries. “Given the limited volume of trade between the two sides, travellers will be the main beneficiaries of this provision,” the official said.

BFIs here have to conduct transactions as per the merchant agreement signed with the card companies and submit a copy of the agreement.

Details of the transactions should be saved for at least 18 months so that they can be submitted to the card companies if required. If claims are made on the transactions made through cards and money should be withdrawn or taken, it should be settled as per the rules of the card company.

The BFIs will have to send the details of the transactions whose settlement could not take place or the amount paid for the claims made should be sent to NRB within a month of the closing of the half-yearly and annual transactions.

They are also required to abide by the Anti-Money Laundering Act while doing such transactions.
source : ekantipur