Nepal Payments & Fintech Regulation

NP schema world-payments-v1 trajectory: not yet assessed

Last updated · 14 modules · 134 sourced findings · 135 sources in the cumulative register

Jurisdiction brief

Latest update · 3 November 2026

Lead Signal

Nepal's payments and banking sector faced a sector-wide precautionary website shutdown from 23 October 2026, after the National Cyber Security Centre issued an advisory on 22 October 2026 flagging two critical, remotely exploitable PHP vulnerabilities. Nepal Rastra Bank directed banks, payment system operators, payment service providers and remittance companies to strengthen server security and monitoring, and institutions across the sector took their websites and online services offline as a precaution while the underlying weaknesses in the systems operating behind those websites were addressed. Security researchers reportedly used artificial intelligence models in identifying the vulnerabilities, a detail that is itself a notable feature of how this disclosure surfaced. The episode is best read as an infrastructure-resilience event rather than an isolated technical incident: it touched the online channels of banks and government agencies simultaneously, which points to a shared technology dependency across the formally regulated payments sector rather than an exposure confined to any single institution.

Key regulatory facts for Nepal
Regulatory DimensionNepal Standing Position
JurisdictionNepal (NP)
Regulatory ScopePayments & Fintech Regulation (14 modules, 134 sourced findings)
Licensing, Authorisation & Market AccessThe Payment and Settlement (First Amendment) Bill, 2083 -- introducing a fintech regulatory sandbox, mandatory National Payment Switch integration, a 30-day wallet-refund guarantee on licence revocation, and...
Conduct, Safeguarding & PromotionsNRB issued a directive under Payment and Settlement Act 2019 s.45 requiring retroactive collection of shareholder/director/senior-management background and beneficial-ownership information for all licensed payment...
Stablecoins & Digital MoneyNepal maintains a comprehensive, judicially-upheld ban on all private cryptocurrency and stablecoin activity, grounded in the Foreign Exchange (Regulation) Act 1962/2019 and NRB Act 2058 Sections 4, 5(d) and 113.
Operational Resilience & Critical InfrastructureNRB operates the RTGS system under the Payment System Related Unified Directives, 2081 and has published a Framework for Identifying Systemically Important Payment Systems (SIPS), formalising a systemic-risk-based...
Primary Instruments CitedNepal Official Instrument (nrb.org.np Frameowrk-for-Identifying-System), Nepal Official Instrument (pradhanlaw.com licensing-policy-for-institution), Nepal Official Instrument (corporatenp.com fintech-psp-registration-nepal), Nepal Official Instrument (nrb.org.np 2024-Report_BOK-KPP-pdf), Nepal Official Instrument (ekantipur.com draft-amendment-to-the-nepal-ras)
Last Confirmed / Updated2026-11-04 (135 sources in cumulative register)

#

The Payment and Settlement (First Amendment) Bill, 2083 -- introducing a fintech regulatory sandbox, mandatory National Payment Switch integration, a 30-day wallet-refund guarantee on licence revocation, and provision for foreign/global digital payment providers to enter the market -- was unanimously passed by the House of Representatives on 2026-09-23 and referred to the Finance Committee for clause-by-clause discussion (reported 2026-10-01/02). The bill has not yet been authenticated into law; NRB's existing Unified Payment System Directive and PSO/PSP licensing regime remain in force pending enactment.

Key judgment — Probable · impact ELEVATEDNepal's Payment and Settlement (First Amendment) Bill, 2083 represents a structural liberalisation step for digital-payment market access, contingent on enactment following committee review.claims: none recorded
Open gap — wpm-int-1No formal NRB circular amending the Unified Directive 2082 KYC provision following the Supreme Court ruling has been located yet.Financial-promotion/consumer-redress enforcement in emerging-market jurisdictions remains under-indexed relative to Anglosphere/EU redress regimes.
Horizon · 2026-10-17 (± a quarter)National ID verification for digital wallets becomes mandatoryAdopted, not yet in force · Tier 3 source
Horizon · 2026-10-17 (± a quarter)National ID verification for digital wallets becomes mandatoryAdopted, not yet in force · Tier 3 source
Horizon · 2026-Q4 (± six months)NRB Act 2058 amendment consultation outcomeConsultation · Tier 3 source
Horizon · 2026-Q4 (± a quarter)Payment and Settlement (First Amendment) Bill, 2083 committee discussion / possible enactmentProposed · Tier 2 source
Standing sub-brief · as of 4 July 2026 362 words · last cycle 2026-11-01

Licensing, Authorisation & Market Access

Nepal's market-access architecture is anchored in the Payment and Settlement Act 2075 (2019), operationalised through the Payment and Settlement Bylaw 2077 and the Licensing Policy for Institutions that Perform Payment-Related Work 2079. Nepal Rastra Bank licenses two distinct categories: Payment System Operators (PSOs, infrastructure/switching) and Payment Service Providers (PSPs, customer-facing), with a bar on any single entity holding both licence types simultaneously - an exclusivity rule that does not apply to banks and financial institutions, which may hold either or both. This split forces non-bank entrants to make an early architectural choice between infrastructure and customer-facing roles, a choice banks are not required to make.

Periodic update · new data 2026-11-03

Licensing, Authorisation & Market Access

A Supreme Court mandamus order issued 9-10 October 2026 quashed, to the extent it had been challenged, the provision of Nepal Rastra Bank's Unified/Integrated Directive 2082 that had made the National ID card or its number the sole basis for verifying a customer's identity when opening, renewing, or updating a bank account. The effect of the ruling is that banks may no longer treat the National ID card as the only acceptable means of identity verification, and the court has directed that banks continue accepting citizenship certificates as an alternative identity-verification document for as long as National ID issuance remains incomplete nationwide. This is a licensing and market-access matter in substance even though it arrived through litigation rather than through a regulatory consultation: it governs the conditions under which a customer can access a bank account at all, and a sole-document mandate that excludes a still-substantial unbanked or under-documented population would have operated as a practical market-access barrier for exactly the customers least likely to already hold a National ID card.

The ruling leaves open, for the moment, exactly how Nepal Rastra Bank will formally reconcile the text of Unified Directive 2082 with the court's order. Banks are currently operating under the court's direction, continuing to accept citizenship certificates, but the directive itself has not yet been confirmed as formally amended to reflect that outcome, which means institutions are navigating a period in which the operative instruction comes from a judicial order rather than from an updated regulatory text. For bank compliance and onboarding functions, this creates a transitional state: the substantive obligation is clear, accept citizenship certificates pending full National ID rollout, but the documentary hierarchy a bank should apply going forward, and whether any further conditions attach to that acceptance, will likely depend on the eventual NRB circular. Until that circular appears, banks are each interpreting and implementing the mandamus order independently, which creates some scope for inconsistency in practice across institutions even though the underlying legal position is uniform.

The practical consequence for market access is most significant at the point of new account opening, where the choice of acceptable identity document directly determines whether a prospective customer without a National ID card can be onboarded at all. For existing accounts undergoing periodic KYC renewal or update, the same question arises in a lower-stakes form, since an existing banking relationship is less likely to be immediately disrupted but will still require banks to have a clear, lawful basis for accepting continued use of a citizenship certificate rather than requiring a National ID update as a condition of renewal.

Outlook

The key development to track is whether and when Nepal Rastra Bank issues a formal circular amending Unified Directive 2082 to align its text with the Supreme Court's order, since that circular would resolve the current gap between judicial direction and regulatory text and would likely standardise how banks across the sector implement the citizenship-certificate alternative going forward. Until such a circular appears, bank-level practice may vary somewhat even though the underlying legal entitlement for customers is now settled.

6 earlier distinct update(s)
Periodic update · new data 2026-10-18

Licensing, Authorisation & Market Access

Nepal's licensing and market-access environment this cycle shows movement on two separate tracks: an immediate liberalisation of foreign-exchange and payment transaction limits, and a pending structural reclassification of the non-bank payments sector. Nepal Rastra Bank amended Unified Circular 2082 to double the annual limit for foreign exchange facilities provided by banks and financial institutions, from USD 15,000 to USD 30,000, and separately raised the limit applicable to satellite-service payments from USD 100,000 to USD 500,000. Both changes expand the volume of cross-border payment activity individuals and businesses can conduct through licensed bank and non-bank channels without additional authorisation, and represent a liberalising rather than restrictive regulatory posture at the central bank this cycle.

The more structurally significant development remains unresolved. The Nepal Rastra Bank (Third Amendment) Bill, 2083 would define payment service providers, payment system operators and remittance companies as financial institutions under the Nepal Rastra Bank Act 2058. The House of Representatives unanimously approved sending the Bill to the relevant parliamentary committee for clause-by-clause discussion, alongside the separate Tourism Bill, but the reclassification itself has not been enacted and its final scope remains to be settled in committee. A reclassification of this kind would bring non-bank payment entities within a supervisory category previously associated with deposit-taking institutions, with implications for prudential requirements, capital treatment, and the regulatory relationship between Nepal Rastra Bank and the payment service providers and remittance companies operating under it. Because this item pre-dates the current anchor window and because no independent confirmation of the Bill's eventual enacted form exists yet, confidence in how the reclassification will ultimately apply is held at the probable tier.

Taken together, these two developments point toward a Nepal Rastra Bank posture of expanding payment-access limits for consumers and businesses in the near term, while simultaneously working through a longer-horizon structural question of how non-bank payment entities should be classified and supervised. The two tracks are not directly linked in the available material, but both bear on the same underlying question of how far Nepal's payments market access regime extends beyond traditional banking channels.

Outlook

The Third Amendment Bill's progress through committee stage is the item to track most closely for market-access implications: enactment would represent the most significant licensing-architecture change for Nepal's non-bank payments sector identified this cycle. The foreign-exchange and satellite-payment limit increases are already in effect and should be expected to show up in transaction-volume reporting in subsequent cycles as businesses and individuals take advantage of the higher thresholds.

Periodic update · new data 2026-09-28

Licensing, Authorisation & Market Access

Nepal Rastra Bank has put forward a draft amendment to Section 2(chha) of the Nepal Rastra Bank Act, 2058 that would formally define payment system operators, payment service providers, remittance companies and digital banks as "financial institutions" under Nepali law for the first time. This is currently at consultation stage, and two significant questions remain open: the applicable corporate tax rate, with debate between 25 and 30 percent, and the share-classification and lock-in rules that would apply to these newly reclassified entities. The reclassification carries real weight for market access: formal financial-institution status typically brings both stricter prudential obligations and clearer legal standing, and how the tax and share-structure questions are resolved will materially affect the cost of establishing or operating a non-bank payment institution in Nepal going forward.

Separately, NRB circulars reported this period raised the simplified-KYC onboarding threshold for wallet accounts from NPR 5,000 to NPR 10,000 in monthly turnover, and mandated real-time settlement, replacing a previous T+1 standard, for interoperable QR merchant payouts. These are drawn from a single, less-corroborated source this period and should be read with that caveat, but if accurate they represent a loosening of onboarding friction for smaller wallet users paired with a tightening of settlement speed expectations for merchant-facing QR transactions.

Outlook

The consultation outcome on the draft NRB Act amendment, expected toward the fourth quarter of 2026 on a half-year uncertainty band, is the key event to watch for this module. Its resolution of the tax-rate and share-classification questions will determine the practical licensing and market-access calculus for payment service providers, remittance companies and digital banks operating, or seeking to operate, in Nepal.

Periodic update · new data 2026-09-21

Licensing, Authorisation & Market Access

Nepal Rastra Bank published a Strategic Framework for a five-year Fintech Strategy for Digital Financial Services, covering 2026/27 through 2030/31 and structured around infrastructure, policy/regulation/governance, and ecosystem-development pillars. This is a Tier-1 primary-regulator publication and it sets the medium-term regulatory posture for payment-services licensing and market access, though the framework document itself does not announce a new numeric rule at publication.

Alongside the strategic framework, two concrete market-access developments materialised this cycle. NRB circulars issued in March and July 2026 (Circular 02/2026 and 07/2026, per secondary reporting) raised the simplified-KYC threshold for wallet onboarding from NPR 5,000 to NPR 10,000 monthly turnover, loosening onboarding friction for lower-value wallet use cases. Separately, NRB opened its first FinTech regulatory sandbox in early 2026; an inaugural cohort of eight participants was admitted and four graduated over a six-month window, testing payments, remittances, credit-scoring and financial-inclusion use cases. This evidences an active rather than purely announced supervisory-innovation mechanism.

The bank-PSP versus non-bank-PI/EMI distinction is directly engaged by NRB's Fintech Strategy, which names a 'level playing field' sub-pillar intended to address fair-competition treatment between bank-owned and non-bank payment applications -- a response to a long-standing structural friction point in Nepal's payments market access regime, discussed further under Industry Structure below.

Outlook

Watch for implementing directives that translate the Fintech Strategy's pillars into specific licensing rules, and for the second sandbox cohort's composition and outcomes as a signal of whether NRB's regulatory-innovation posture continues at the current pace. The KYC-threshold change should also be watched for further upward revision given the current strategy's inclusion focus.

Periodic update · new data 2026-09-14

Licensing, Authorisation & Market Access

Nepal's payment-licensing framework is well-established and actively enforced. The Payment and Settlement Act, 2075 (2019) requires all payment-related activity in Nepal to be conducted under a Payment System Operator or Payment Service Provider licence issued by Nepal Rastra Bank; operating without NRB approval is illegal under Section 5 of the Act. This core licensing requirement applies uniformly across both bank-affiliated and non-bank payment providers, and there is no carve-out for smaller or app-based digital-wallet operators: digital-wallet operation without NRB approval is explicitly illegal, underscoring that Nepal draws no meaningful distinction between traditional bank-linked payment rails and standalone non-bank payment-institution/e-money-institution models for licensing purposes -- both fall under the same PSO/PSP licensing umbrella.

The licensing policy itself was refreshed in 2079 (2023), when Nepal Rastra Bank's Licensing Policy for institutions performing payment-related work replaced the prior 2076 (2019) policy. A notable market-access feature of the 2079 policy is its extraterritorial application: it extends to foreign entities performing payment-related work in Nepal, meaning offshore payment providers targeting the Nepali market cannot rely on operating outside NRB's licensing perimeter simply by virtue of being domiciled abroad. As of this cycle, over 10 payment system operators and 27 payment service providers are licensed under this framework, indicating an established and reasonably populated non-bank payment sector operating alongside bank-affiliated payment rails.

A development with direct bearing on this licensing architecture, though not yet resolved, is a draft amendment to the Nepal Rastra Bank Act currently under stakeholder discussion. The amendment proposes including payment system operators and payment service providers within the statutory definition of 'financial institution,' a category that today applies only under the Bank and Financial Institutions Act (BAFIA). If enacted, this would fold non-bank payment institutions into a regulatory category historically reserved for deposit-taking banks and financial institutions, and stakeholders have flagged the risk that this could create conflict between BAFIA's financial-institution framework and the Payment and Settlement Act's own separate licensing regime for PSOs/PSPs. The amendment remains at the discussion stage and has not been enacted.

Outlook

The key market-access question to watch is whether the draft NRB Act amendment proceeds to enactment in its current form, and if so, how the resulting BAFIA/Payment and Settlement Act interaction is resolved for licensed non-bank payment providers. A resolution that preserves the existing PSO/PSP licensing pathway as the operative regime for payment institutions, while clarifying rather than duplicating BAFIA obligations, would minimise market-access disruption; an unresolved overlap could create compliance uncertainty for both incumbent and prospective foreign payment-institution entrants.

Periodic update · new data 2026-09-05

Licensing, Authorisation & Market Access

Nepal Rastra Bank is actively reworking two structural pillars of payments market access this cycle. A draft amendment to the Nepal Rastra Bank Act proposes reclassifying payment system operators and payment service providers as financial institutions, a change stakeholders have warned could create conflicting-provision risk against the separate Payment and Settlement Act 2075 (2018) framework under which these entities are currently licensed and supervised. This is a genuine structural legal-clarity concern: if the reclassification proceeds without careful sequencing, market entrants and existing licensees alike would face ambiguity over which statute, and which prudential regime, ultimately governs their obligations.

Alongside this, Nepal Rastra Bank's Payment Systems Department continues to maintain its roster of licensed payment system operators and payment service providers, most recently republished on 16 April 2026 and currently including eSewa, Khalti, IME Pay, PrabhuPay and CellPay, all licensed under the Payment Systems Act 2075 (2018) and the Payment Systems Regulation 2076 (2019). This non-bank payment-institution roster is distinct from bank-channel payment licensing, and the reclassification debate above bears specifically on this non-bank population's regulatory home.

Outlook

Watch whether the draft NRB Act amendment advances to enactment, and if so, whether transitional provisions are included to resolve the overlap with the Payment and Settlement Act rather than leaving licensed non-bank payment institutions to navigate two potentially competing statutory regimes.

Periodic update · new data 2026-08-11

Licensing, Authorisation & Market Access

Nepal Rastra Bank tightened the licensing and ongoing-authorisation conditions attached to payment institutions this cycle through amendments to the Integrated Directive on Payment Systems, 2082. Payment service providers must now verify national ID details for wallet creation and updates, with compliance required by Ashwin 2083 (BS), and licensed payment institutions must retroactively collect and submit prescribed information for all existing shareholders, directors, beneficial owners and senior management — a screening obligation applied to an already-operating population rather than only to new licensees, with heavy corporate fines or licence suspension as the stated consequence of failure. Read together, these two amendments represent a shift from point-in-time licensing checks toward continuous KYC and beneficial-ownership monitoring of payment institutions, a structural conduct-supervision upgrade rather than a one-off circular. This obligation sits squarely on the non-bank payment-institution and e-money-institution side of the regulatory perimeter, distinct from bank-channel conduct rules addressed separately under Conduct, Safeguarding & Financial Promotions.

Separately, NRB has directed payment-related companies to adopt settlement-guarantee-fund-type credit-risk mechanisms and has encouraged — though not yet mandated — the integration of AI/ML tools into fraud-risk management systems. The encouragement language is explicitly non-binding at this stage, distinguishing it from the hard national-ID and BO-screening requirements that carry fine and suspension consequences.

Outlook

The Ashwin 2083 compliance deadline for wallet national-ID verification is the near-term marker to watch: whether PSPs complete verification at scale by that date will determine whether NRB's shift toward continuous KYC/BO monitoring translates into effective market-access friction for non-compliant institutions or remains a paper requirement. Whether NRB moves from encouraging to mandating AI/ML fraud-risk integration is a second marker for the following cycle.

1 earlier update recorded under a different module label

An early cycle filed this entry under this module code with a heading naming another subject. Kept for the record; not this module's latest position.

Periodic update · new data 2026-11-04

Regulatory Status

Nepal's Supreme Court has quashed the provision of Nepal Rastra Bank's Unified/Integrated Directive 2082 that made the National ID card, or its number, the sole basis on which banks could verify a customer's identity for opening or renewing an account or updating know-your-customer records. The court's mandamus order, issued on 9-10 October 2026, holds that the requirement to use the NID Card or its number as the sole basis for verifying a citizen's identity shall not be mandatory, and directs banks to continue accepting citizenship certificates and other existing forms of documentation pending wider NID issuance. The ruling received wide public reporting only after 25 October 2026, some two weeks after it was handed down.

The practical effect is to reopen the range of documents banks may rely on for account opening and periodic KYC refreshes, reversing a directive provision that had tied onboarding and renewal to a single national identity credential. With NID card issuance still incomplete across the population, banks that had begun tightening onboarding around the NID requirement will need to revert to accepting citizenship certificates and other accepted identification as valid substitutes. No formal circular from Nepal Rastra Bank amending the Unified Directive 2082 text to reflect the court's order had been located as at the time of reporting, leaving banks to apply the ruling against the directive's unamended wording in the interim.

Outlook

Expect Nepal Rastra Bank to issue a conforming amendment to the Unified Directive in the coming weeks to bring the written rule into line with the court's order; until that happens, banks are operating under a instruction that sits awkwardly against the directive's original text. Institutions should anticipate renewed onboarding friction in the short term as branch-level staff adjust to accepting a broader document set again, and should watch for any NRB clarification on how long the dual standard (NID where available, citizenship certificate otherwise) will remain in place as national identity card issuance continues to roll out.

Sources and findings (26)
  1. T1https://www.nrb.org.np/contents/uploads/2025/09/Frameowrk-for-Identifying-Systemically-Important-Payment-Systems_01-09-2025-1.pdfretrieved
  2. T2https://pradhanlaw.com/publications/licensing-policy-for-institutions-that-perform-payment-related-work-2079-2023-adretrieved
  3. T3https://corporatenp.com/post/fintech-psp-registration-nepalretrieved
  4. T1https://www.nrb.org.np/contents/uploads/2025/02/2024-Report_BOK-KPP.pdfretrieved
  5. T3https://ekantipur.com/business/2026/03/01/en/draft-amendment-to-the-nepal-rastra-bank-act-proposal-to-include-payment-system-operators-and-service-providers-in-financial-institutions-41-52.htmlretrieved
  6. T3https://www.lawimperial.com/registration-of-payment-service-provider/retrieved
  7. T1https://www.nrb.org.np/contents/uploads/2025/01/Payment-Oversight-Report-2023-24.pdfretrieved
  8. T2Nepal Supreme Court — Nepal Supreme Court — Quashed NRB Unified/Integrated Directive 2082 provision making NID the sole basis of customer identity for bank account opening/renewal/KYC updateretrieved
  9. T2Nepal Rastra Bank (NRB) — Nepal Rastra Bank (NRB) — annual FX facility limit doubled USD 15,000 to 30,000; satellite-service limit raised USD 100,000 to 500,000retrieved
  10. T3Nepal Rastra Bank Act, 2058 (draft amendment) — Nepal Rastra Bank Act, 2058 (draft amendment) — Draft amendment to Section 2(chha) would formally define PSOs, PSPs, remittance companies and digital banks as 'financial institutions'; consultation-stage with open questions on corporate tax rate (25% vs 30%) and share-classification/lock-in rules.retrieved
  11. T1Nepal Rastra Bank — Nepal Rastra Bank — NRB Payment Systems Department published a Strategic Framework for a five-year Fintech Strategy for Digital Financial Services (2026/27-2030/31).retrieved
  12. T1Nepal Rastra Bank — Nepal Rastra Bank — All payment-related activity in Nepal requires a PSO or PSP licence from NRB under the Payment and Settlement Act, 2075 (2019); operating without approval is illegal.retrieved
  13. T3Nepal Rastra Bank — Nepal Rastra Bank — 15th amendment to the Unified/Integrated Payment Systems Directive makes National ID verification mandatory for opening and updating digital wallets, self-declaration deadline 17 October 2026.retrieved
  14. T3Nepal Rastra Bank — Nepal Rastra Bank — Amended Unified Directive on Payment Systems 2025 requires PSPs to report personal/investor details when share purchases exceed 5% of paid-up capital or NPR 5 million.retrieved
  15. T1Nepal Rastra Bank Payment Systems Department — Nepal Rastra Bank Payment Systems Department — NRB PSD revised transaction limits for payment instruments and issued an interoperability directive for QR/e-wallet rails during the 2023-24 oversight period.retrieved
  16. T1Nepal Rastra Bank — Nepal Rastra Bank — NRB licenses two distinct payments categories - Payment System Operators (PSOs, infrastructure/switching) and Payment Service Providers (PSPs, customer-facing) - under the Payment and Settlement Act 2075 (2019), with a bar on holding both licences simultaneously except for banks/FIs.retrieved
  17. T3PSO/PSP capital regime — PSO/PSP capital regime — PSO Class A requires NPR 500 million, PSO Class B requires NPR 100 million, and PSPs require NPR 50 million minimum paid-up capital; foreign investors may own up to 80% subject to minimum FDI of NPR 20 million and NRB approval.retrieved
  18. T3Nepal Rastra Bank — Nepal Rastra Bank — 2079 (2023) Licensing Policy for institutions performing payment-related work replaced the 2076 (2019) policy and applies extraterritorially to foreign entities operating payment work in Nepal.retrieved
  19. T3Nepal — Nepal — Over 10 licensed PSOs and 27 licensed PSPs; digital-wallet operation without NRB approval is illegal.retrieved
  20. T3Nepal Rastra Bank — Nepal Rastra Bank — NRB circulars issued March and July 2026 (Circular 02/2026 and 07/2026) raised the simplified-KYC threshold for wallet onboarding from NPR 5,000 to NPR 10,000 monthly turnover.retrieved
  21. T3Nepal Rastra Bank — Nepal Rastra Bank — NRB opened its first FinTech regulatory sandbox in early 2026; inaugural cohort of eight admitted, four graduated, covering payments, remittances, credit-scoring and financial-inclusion use cases over a six-month window.retrieved
  22. T4NRB circulars 02/2026 and 07/2026 — NRB circulars 02/2026 and 07/2026 — Raised simplified-KYC onboarding threshold for wallets from NPR 5,000 to NPR 10,000 monthly turnover; mandated real-time (previously T+1) settlement for interoperable QR merchant payouts.retrieved
  23. T2Payment and Settlement (First Amendment) Bill, 2083 — Payment and Settlement (First Amendment) Bill, 2083 — Fintech regulatory sandbox, mandatory National Payment Switch integration, 30-day wallet-refund guarantee on licence revocation, pathway for foreign/global digital payment providersretrieved
  24. T2Payment and Settlement (First Amendment) Bill, 2083 — Payment and Settlement (First Amendment) Bill, 2083 — Referred to Finance Committee for clause-by-clause discussionretrieved
  25. T1Nepal Rastra Bank — Nepal Rastra Bank — Strategic Framework of the Fintech Strategy for Digital Financial Services, promoting responsible development of digital financial services and fintech innovation through enabling policiesretrieved
  26. T2Nepal Rastra Bank (Third Amendment) Bill, 2083 — Nepal Rastra Bank (Third Amendment) Bill, 2083 — would define PSPs, PSOs and remittance companies as 'financial institutions' under NRB Act 2058retrieved

#

NRB issued a directive under Payment and Settlement Act 2019 s.45 requiring retroactive collection of shareholder/director/senior-management background and beneficial-ownership information for all licensed payment institutions; no corporate insider is exempt.

Horizon · 2026-10-17 (± a quarter)NID linkage deadline for existing digital-wallet holdersAdopted, not yet in force · Tier 3 source
Standing sub-brief · as of 4 July 2026 250 words · last cycle 2026-09-28

Conduct, Safeguarding & Financial Promotions

Nepal's approach to customer-fund protection departs structurally from the segregation/trust-account model common in more developed payments markets. Rather than requiring licensed PSPs to ring-fence customer funds in a dedicated trust or segregated account, the regime requires PSPs to enter a formal settlement-bank agreement for clearing/settlement before commencing operations, and this arrangement functions as the core customer-fund-protection mechanism in lieu of a dedicated segregation regime. In practice, this means the protection of customer balances is mediated through the commercial relationship between a PSP and its settlement bank, rather than through a standalone legal segregation requirement enforceable independently of that banking relationship.

Periodic update · new data 2026-09-28

Conduct, Safeguarding & Financial Promotions

Nepal Rastra Bank's Unified Payment System Directive, 2082 imposes a National ID linkage mandate on digital-wallet accounts, with a hard deadline of end-Ashwin 2083, corresponding to mid-October 2026, for existing NID holders to link their identification to their wallet accounts. Non-resident Nepali citizens are given additional flexibility, with a linkage window measured from the date of their return to the country rather than the fixed deadline. This is a firm, dated conduct and KYC-linkage obligation rather than a proposal, and it sits within the current in-force-pending horizon window.

The same Directive is also reported, on a single less-corroborated source this period, to impose specific wallet transaction and balance limits: wallet-to-wallet transfers capped at NPR 50,000 per day and NPR 500,000 per month, bank-to-wallet transfers capped at NPR 200,000 per day and NPR 1,000,000 per month, and an overnight wallet-balance cap of NPR 50,000. These figures should be read with appropriate caution given the single-source basis, but if accurate they represent a concrete, quantified conduct-and-safeguarding ceiling on wallet usage that sits alongside the NID-linkage requirement as part of the same Directive's broader tightening of digital-wallet conduct rules.

Outlook

The mid-October 2026 NID-linkage deadline is a fixed, near-term compliance date for wallet providers and their customers, independent of how the broader NRB Act classification debate resolves. Confirmation of the specific transaction and balance-cap figures from an additional source would strengthen confidence in the numeric detail of this module's findings.

2 earlier distinct update(s)
Periodic update · new data 2026-09-05

Conduct, Safeguarding & Financial Promotions

Nepal Rastra Bank has issued a directive under Section 45 of the Payment and Settlement Act 2019 requiring all licensed payment institutions to retroactively collect background and beneficial-ownership data covering every shareholder, director and member of senior management. No corporate insider is exempt from this screening regardless of the size of their direct or indirect ownership, control, or ultimate-beneficial-owner interest. This is a materially tightening conduct-and-safeguarding measure: it converts beneficial-ownership visibility from a point-in-time licensing check into an ongoing, retroactively applied fit-and-proper standard covering the full population of already-licensed payment institutions, not only new market entrants.

The practical effect falls specifically on the non-bank payment-institution and e-money-issuer population supervised under the Payment and Settlement Act, distinct from bank-channel conduct supervision, and represents a distinct tightening relative to Nepal's prior, licensing-stage-only ownership disclosure practice.

Outlook

The operational question for the next cycle is implementation timeline and evidentiary standard: how quickly licensed institutions can complete retroactive collection across their full shareholder, director and senior-management population, and what documentation standard Nepal Rastra Bank will accept as satisfying the directive.

Periodic update · new data 2026-08-11

Conduct, Safeguarding & Financial Promotions

Nepal Rastra Bank amended the Government Transaction Directive, 2076 this cycle to tighten government-account cheque payment conduct: government-account payments must now be made only via the formal financial payment system or account-payee cheques, and cheque writers and protectors are now mandatory. This is a bank-channel conduct amendment — distinct from the non-bank PSP/EMI-focused wallet-KYC and beneficial-ownership amendments tracked under Licensing, Authorisation & Market Access this cycle — and is logged here as a dated conduct-rule entry rather than a standing explainer, consistent with its dashboard-tier evidentiary weight this cycle.

Outlook

No further conduct, safeguarding, or financial-promotions development beyond this cheque-conduct amendment was evidenced for Nepal this cycle.

Sources and findings (8)
  1. T3https://www.lawimperial.com/registration-of-payment-service-provider/retrieved
  2. T3https://techlekh.com/digital-payment-providers-interoperability-nepal/retrieved
  3. T3https://ictframe.com/nrbs-notice-on-eps/retrieved
  4. T3https://jkeconomicassociation.com/consumer-protection-in-the-digital-marketplace-legal-frameworks-courts-and-enforcement-practices/retrieved
  5. T3https://www.fiscalnepal.com/2025/03/20/19895/digital-wallet-leaders-ime-pay-and-khalti-merge-to-rival-esewa-begin-dda/retrieved
  6. T3Nepal PSP safeguarding regime — Nepal PSP safeguarding regime — Licensed PSPs must enter a formal settlement-bank agreement for clearing/settlement before commencing operations, functioning as the core customer-fund-protection mechanism in lieu of a dedicated trust/segregation regime.retrieved
  7. T3NRB Unified Payment System Directive, 2082 — NRB Unified Payment System Directive, 2082 — NID mandate for digital wallets carries a hard deadline of end-Ashwin 2083 (mid-October 2026) for existing NID holders to link NID to wallet accounts; alternative flexibility for non-resident citizens.retrieved
  8. T4NRB Unified Payment System Directive, 2082 — NRB Unified Payment System Directive, 2082 — Wallet-to-wallet transfers capped at NPR 50,000/day and NPR 500,000/month; bank-wallet transfers capped at NPR 200,000/day and NPR 1,000,000/month; overnight wallet-balance cap of NPR 50,000.retrieved

#

Nepal maintains a comprehensive, judicially-upheld ban on all private cryptocurrency and stablecoin activity, grounded in the Foreign Exchange (Regulation) Act 1962/2019 and NRB Act 2058 Sections 4, 5(d) and 113. NRB is separately exploring a CBDC but has no live retail pilot as of mid-2026; a CBDC would not legalise private crypto.

Standing sub-brief · as of 4 July 2026 252 words · last cycle 2026-07-04

Stablecoins & Digital Money

Nepal maintains one of the most comprehensive private-crypto prohibitions in the region. The ban covers trading, holding, mining, membership, investment, ownership, transfer and promotion of any virtual currency or cryptocurrency, including stablecoins, together with NFTs and DeFi activity, grounded in the Foreign Exchange (Regulation) Act 1962/2019 and several sections of the NRB Act 2058. The prohibition is not merely administrative guidance; it was tested and upheld by the Supreme Court in 2022 (see W7), giving it a judicial durability that distinguishes Nepal's ban from softer, guidance-only restrictions seen elsewhere.

no periodic updates on record for this sub-brief

Sources and findings (7)
  1. T3https://lawfirmnepal.com.np/publications/cryptocurrency-in-nepalretrieved
  2. T3https://notarynepal.com/blog/legal-provisions-on-cryptocurrency-in-nepalretrieved
  3. T3https://lawbhandari.com/publication/crypto-currency-law-in-nepal-prosecution-of-crypto-casesretrieved
  4. T3https://sic.gov.lb/en/newsletter/nepal-central-bank-plans-cbdc-within-two-years-crypto-and-stablecoin-still-excluded-saysretrieved
  5. T3https://notarynepal.com/blog/punishment-for-cryptocurrency-in-nepalretrieved
  6. T3Nepal private-cryptocurrency ban — Nepal private-cryptocurrency ban — Trading, holding, mining, membership, investment, ownership, transfer and promotion of any virtual currency/cryptocurrency (including stablecoins), NFTs and DeFi, under the Foreign Exchange (Regulation) Act 1962/2019 and NRB Act 2058 Sections 4, 5(d), 52, 61 and 113.retrieved
  7. T1Nepal Rastra Bank CBDC programme — Nepal Rastra Bank CBDC programme — NRB is exploring a central bank digital currency ('digital rupee') and has appealed for NRB Act amendment to permit issuance; remains at concept/study stage with no live retail pilot as of mid-2026.retrieved

#

NRB operates the RTGS system under the Payment System Related Unified Directives, 2081 and has published a Framework for Identifying Systemically Important Payment Systems (SIPS), formalising a systemic-risk-based oversight tier aligned to PFMI-style standards.

Kept on Dataprotection.gi, not restated here: data and cloud switching obligations on service providers, including notice periods and charges. Open its jurisdiction pages on Dataprotection.gi →

Standing sub-brief · as of 4 July 2026 187 words · last cycle 2026-11-01

Operational Resilience & Critical Infrastructure

Nepal's operational-resilience regime is anchored in NRB's Cyber Resilience Guidelines 2023, enforced since August 2023, which require vulnerability assessments, penetration testing, red-team exercises, disaster-recovery sites, and mandatory biennial system audits for all licensed PSPs/PSOs and BFIs, aligned to BIS Principles for Financial Market Infrastructures. This is a substantive baseline requirement set, placing recurring, independently-verifiable resilience testing obligations on both bank and non-bank payments entities.

Periodic update · new data 2026-11-03

Operational Resilience & Critical Infrastructure

Nepal's financial sector experienced a coordinated precautionary shutdown of online banking and payment services beginning 23 October 2026, following a National Cyber Security Centre advisory issued the previous day that identified two critical, remotely exploitable vulnerabilities in PHP, the server-side scripting language underpinning a large share of the websites operated by Nepali banks and government agencies. Nepal Rastra Bank issued an urgent notice directing banks, payment system operators, payment service providers, and remittance companies to strengthen server security and monitoring, and institutions across the regulated payments sector responded by taking their public-facing websites and online services offline while the underlying weaknesses were addressed. Notably, the vulnerabilities were reportedly identified when security researchers used artificial intelligence models in the course of their analysis, a detail that marks a shift in how critical infrastructure vulnerabilities are being surfaced and may itself be relevant to how the sector approaches vulnerability disclosure and remediation cycles going forward.

The decision to take services offline sector-wide, rather than relying on institution-by-institution patching while remaining online, indicates that the vulnerabilities were assessed as sufficiently severe and sufficiently widespread across the technology stack common to the sector that continued operation posed an unacceptable risk. This is consistent with an architecture-level reading of the event: the exposure was not a flaw specific to any single bank's implementation but a weakness in a shared underlying technology layer used broadly across banks and government systems alike, which is precisely the kind of common-dependency risk that critical-infrastructure resilience frameworks are designed to surface and address. The National Cyber Security Centre's role in issuing the advisory that preceded the coordinated shutdown is itself a notable institutional data point, indicating that Nepal now has, or is exercising, a central advisory function capable of prompting sector-wide precautionary action across both financial and government online services simultaneously.

For payment service providers and remittance companies specifically, a shutdown of online channels has direct operational consequences for transaction processing and customer access, particularly for remittance flows that may rely heavily on digital channels for both inbound processing and outbound disbursement. The duration and scope of the precautionary shutdown, and the sequencing of services being restored as remediation is confirmed, will determine how much of an operational disruption this resilience event actually produced for end users, as distinct from the underlying technical vulnerability itself.

Outlook

The central resilience question going forward is whether the PHP vulnerabilities are confirmed as fully remediated across all affected institutions before services are restored, and whether the National Cyber Security Centre's advisory role in this episode becomes the basis for a more structured, ongoing vulnerability-disclosure relationship with the financial sector rather than a one-off response to a discrete disclosure event. The use of artificial intelligence models in identifying the underlying vulnerabilities is also worth watching as a forward indicator of how vulnerability discovery in Nepal's financial-sector technology stack may increasingly occur.

1 earlier distinct update(s)
Periodic update · new data 2026-09-05

Operational Resilience & Critical Infrastructure

Nepal Rastra Bank published a Framework for Identifying Systemically Important Payment Systems, operationalising a mandate under the Payment and Settlement Act 2019 and aligning Nepal's oversight of critical payment infrastructure with international, PFMI-style standards. This formalises a distinct systemic-risk-based oversight tier for payment systems whose disruption could pose broader financial-stability consequences, where none existed as a named supervisory category before this cycle.

This is a structural, rather than incident-driven, development: the framework itself, not any specific designation made under it, is this cycle's finding. Nepal Rastra Bank has not yet, on the evidence reviewed, named any specific payment system as systemically important under the new framework.

Outlook

The first concrete test of this framework will be whichever payment system Nepal Rastra Bank first designates as systemically important under it; that designation, whenever it occurs, will be the practical signal of how the oversight tier is applied rather than merely described.

1 earlier update recorded under a different module label

An early cycle filed this entry under this module code with a heading naming another subject. Kept for the record; not this module's latest position.

Periodic update · new data 2026-11-04

Regulatory Status

Nepal's payments infrastructure went through a sector-wide precautionary shutdown in late October 2026 after the disclosure of two critical, remotely exploitable vulnerabilities in PHP, the scripting language underlying a large share of the country's banking and government web services. The National Cyber Security Centre issued an advisory on 22 October 2026 describing the weaknesses as having been identified in the systems that operate behind websites, and patches for the underlying flaws had been released the previous day. Within hours, Nepal Rastra Bank and most commercial banks, payment system operators, payment service providers and remittance companies took their websites and online services offline as a precaution, with the central bank issuing an urgent notice directing the sector to strengthen server security and monitoring before restoring public-facing services.

The episode is notable less for the vulnerability itself, which was a global PHP issue rather than something specific to Nepal, than for the breadth and speed of the response: a coordinated, sector-wide suspension of online banking and payment services rather than a handful of isolated outages. Reporting indicates the vulnerabilities were initially flagged when security researchers used artificial intelligence models to probe exposed systems, which then fed into the formal disclosure and patching cycle. The suspensions covered online services at banks and government agencies alike, pointing to a shared technology dependency across public and financial-sector websites that the regulator had not previously had cause to test under pressure.

Outlook

The immediate question is how quickly services were restored and whether Nepal Rastra Bank converts the urgent notice into a lasting supervisory expectation around patch management, server hardening and monitoring for banks, payment system operators, payment service providers and remittance companies. A single coordinated incident of this kind, triggered by a vulnerability in widely used web infrastructure rather than a targeted attack, tends to prompt follow-on supervisory stock-taking even where no funds or customer data are shown to have been compromised. Operators and their technology vendors should expect closer scrutiny of patching cadence and incident-response readiness over the coming months, with the precautionary shutdown likely to be cited as the reference event in any future resilience guidance.

Sources and findings (10)
  1. T3https://n1r4j.medium.com/key-highlights-of-nepal-rastra-banks-new-cyber-resilience-guidelines-4e50aefc3fd3retrieved
  2. T3https://kathmandupost.com/money/2025/09/03/nepal-rastra-bank-rolls-out-framework-to-identify-systemically-important-payment-systemsretrieved
  3. T3https://www.fiscalnepal.com/2024/02/19/15663/central-bank-strengthens-cyber-resilience-guidelines-amid-rising-cybercrime-concerns/retrieved
  4. T1https://www.nrb.org.np/contents/uploads/2025/12/AI-Guidelines.pdfretrieved
  5. T1https://www.nrb.org.np/contents/uploads/2025/02/2024-Report_BOK-KPP.pdfretrieved
  6. T2Nepal Rastra Bank — Nepal Rastra Bank — Precautionary website/online-service suspension from 23 Oct 2026 following PHP vulnerability disclosureretrieved
  7. T3NRB Cyber Resilience Guidelines 2023 — NRB Cyber Resilience Guidelines 2023 — Vulnerability assessments, penetration testing, red-team exercises, disaster-recovery sites, and mandatory biennial system audits for all licensed PSPs/PSOs and BFIs, aligned to BIS PFMI principles.retrieved
  8. T1Nepal Rastra Bank, Payment Systems Department — Nepal Rastra Bank, Payment Systems Department — NRB operates and oversees the RTGS system (launched Sept 2019) and a SIPS identification framework aligned to international principles.retrieved
  9. T1RTGS direct participants — RTGS direct participants — NPR 1,104 billion intraday liquidity facility drawn in FY2023/24, of which NPR 290 billion via overnight liquidity facility.retrieved
  10. T1PHP Foundation / National Cyber Security Centre — PHP Foundation / National Cyber Security Centre — Two critical remotely-exploitable PHP vulnerabilities (CVE-2026-109618, CVE-2026-109619) disclosed with patches 21 Oct 2026; NCSC advisory 22 Oct 2026retrieved

#

Nepal runs a multi-scheme, closed-loop payments landscape (Fonepay, SCT, Nepal Payment Solutions, NEPS/NCHL, plus international VISA/Mastercard/UnionPay as licensed PSOs) that NRB is consolidating via the National Payment Switch (NPS) and mandatory NepalQR (EMVCo-based) standardisation, with a domestic NEPALPAY card scheme gaining international acceptance through Discover Financial Services.

Open gap — wpm-int-2No scheme/network compliance change evidenced for Nepal this cycle.Emerging-market rail coverage for Nepal remains structurally thin absent a T1 primary NRB directive text retrieval.
Standing sub-brief · as of 4 July 2026 203 words · last cycle 2026-07-04

Scheme & Network Compliance

Nepal's scheme landscape has historically been fragmented across multiple closed-loop QR and card schemes operated by different providers, including Fonepay, SCT and Nepal Payment Solutions. NRB's structural response has been twofold: the NepalQR Standardization Framework mandates EMVCo 4.3-based QR specifications across scheme operators, and the National Payment Switch is being built out to consolidate interoperability across this multi-scheme landscape. The direction of travel here is consolidation rather than continued fragmentation, with NRB acting as the active architect of interoperability rather than leaving it to individual scheme operators to negotiate bilaterally.

no periodic updates on record for this sub-brief

Sources and findings (8)
  1. T1https://www.nrb.org.np/psd/nepalqr-standardization-framework-and-guidelines/retrieved
  2. T1https://www.nrb.org.np/contents/uploads/2025/10/National-Payment-Switch-NPS-and-the-National-Payment-Ecosystem-Master-Reference-Document-2025.pdfretrieved
  3. T2https://nchl.com.np/wp-content/uploads/2023/02/1.pdfretrieved
  4. T3https://estartupnepal.com/article/electronic-payment-system-in-nepalretrieved
  5. T3https://techlekh.com/digital-payment-providers-interoperability-nepal/retrieved
  6. T1National Payment Switch (NPS) / NepalQR — National Payment Switch (NPS) / NepalQR — NepalQR Standardization Framework mandates EMVCo 4.3-based QR specifications across scheme operators; NRB is consolidating a fragmented multi-scheme landscape via the National Payment Switch.retrieved
  7. T1NEPALPAY card scheme — Domestic NEPALPAY card scheme is being extended to international acceptance through the Discover Financial Services (DFS) network.retrieved
  8. T3Himalayan Bank — Himalayan Bank — SmartPay IBFT interbank fund transfer network operated by Smart Choice Technologiesretrieved

#

Remittances (~a quarter of GDP) dominate Nepal's cross-border payment dynamics, concentrated in Gulf/GCC, India and Malaysia corridors. A landmark structural shift occurred in June 2026 with the live launch of a direct UPI(India)-NPI(Nepal) real-time linkage via NCHL and NPCI International (go-live 6 June 2026), alongside an earlier Fonepay-NIPL UPI merchant-QR acceptance deal.

Standing sub-brief · as of 4 July 2026 245 words · last cycle 2026-10-18

Payment Corridor Dynamics

Remittances account for roughly a quarter of Nepal's GDP, making corridor dynamics one of the most economically consequential modules in this baseline. Inflows are concentrated in Gulf/GCC corridors (roughly half of transfers, with Qatar alone accounting for 17.7%), India (14.2%) and Malaysia (9.7%). Within this mix, the India-Nepal corridor is already among the cheapest in South Asia, at a 1.9% average transfer cost - a materially lower cost base than Nepal's dominant Gulf corridors, which continue to operate primarily through the 56-plus licensed remittance service providers governed by the Remittance Bylaws 2023 approved-country list.

Periodic update · new data 2026-10-18

Payment Corridor Dynamics

The Nepal-India remittance corridor is the dominant payment-corridor development for Nepal this cycle, notwithstanding that the underlying launch pre-dates the current anchor window. The Nepal Clearing House Limited and the National Payments Corporation of India launched a real-time digital remittance service in June 2026 linking Nepal's National Payments Interface with India's Unified Payments Interface, enabling real-time bank-to-bank peer-to-peer transfers between the two systems. This targets what is described as the single largest and lowest-earning corridor in Nepal's remittance system, a corridor historically served disproportionately by cash and informal transfer mechanisms.

The transfer limits built into the corridor are notably asymmetric. Transfers from India to Nepal are permitted up to INR 200,000 per transaction with no stated monthly cap, while transfers from Nepal to India are capped at INR 15,000 per transaction and INR 100,000 per month. This asymmetry indicates the corridor's design is oriented primarily toward facilitating inbound remittance flow into Nepal, consistent with Nepal's position as a net recipient of remittances from Indian-based Nepali workers and the broader Nepal-India labour migration relationship, rather than toward symmetric bidirectional commercial payment capacity.

The structural significance of this corridor lies in its formalisation effect. By linking two national real-time payment interfaces directly, the NCHL-NPCI arrangement offers a lower-friction, bank-rail alternative to informal and cash-based transfer channels that have historically dominated this corridor, with the implication of greater transaction traceability and reduced reliance on informal networks for a large share of Nepal's inbound remittance volume. No public transaction-volume data is available yet to indicate how much of the corridor's flow has migrated to the new linkage since its June 2026 launch.

Outlook

Transaction-volume migration from informal to formal channels on this corridor is the key indicator to watch going forward, though no such data has been published yet. The asymmetric transfer limits, particularly the Nepal-to-India monthly cap, may face pressure for revision if commercial or trade-related payment demand in that direction proves significant, a question the available material does not yet address.

2 earlier distinct update(s)
Periodic update · new data 2026-09-28

Payment Corridor Dynamics

A new cross-border payment corridor between Nepal and India has been operationalised this period. An arrangement between Fonepay and India's NPCI allows Indian UPI users to pay Nepali merchants directly, and a separate cross-border remittance linkage between NPCI International Payments Limited and Nepal Clearing House Limited went live on 6 June 2026. Together these represent a concrete expansion of inbound cross-border payment capability into Nepal's merchant-payment ecosystem.

The corridor is structurally asymmetric, however: outward scan-and-pay transactions by Nepali residents into India remain restricted under Nepal's existing foreign-exchange rules. This means the liberalisation runs in one direction only, inbound from India to Nepal, while outbound consumer-initiated cross-border payment activity from Nepal remains constrained by capital-control considerations that have not been relaxed alongside the inbound corridor's launch. This asymmetric posture is itself the analytically significant feature: Nepal is simultaneously opening its market to inbound foreign payment flow while maintaining tight control over outbound flow, a combination that reflects continued forex-control caution even as merchant-payment infrastructure integration proceeds.

Outlook

Whether and when the outward scan-and-pay restriction is eased is the key item to watch for this corridor going forward. Its continuation would keep the corridor structurally asymmetric; any relaxation would mark a more significant liberalisation of Nepal's cross-border consumer payment posture than what has been operationalised so far.

Periodic update · new data 2026-09-05

Payment Corridor Dynamics

Nepal's 2026 nationwide shutdown of online betting applications was partly justified on capital-outflow and illegal-financial-transaction grounds, implicating payment-corridor exposure alongside the separate gambling-policy dimension of the same enforcement action. This is a dated, narrowly scoped entry: the payment-infrastructure angle noted here is limited to the corridor and transaction-flow justification cited for the shutdown, not an independent assessment of the underlying gambling-policy question, which is tracked elsewhere.

Outlook

Watch for any further detail on the specific payment corridors or channels implicated, which would sharpen this entry beyond its current dated, single-justification framing.

Sources and findings (9)
  1. T3https://www.daayitwa.org/storage/archives/1704262558.pdfretrieved
  2. T3https://migrantmoney.uncdf.org/wp-content/uploads/2023/02/Nepal-Country-Assessments.pdfretrieved
  3. T3https://www.medianama.com/2026/06/223-india-nepal-upi-payments-live/retrieved
  4. T2https://fonepay.com/blogs/upi-in-nepalretrieved
  5. T3https://www.companydartanepal.com/remittance-company-registration-in-nepal/retrieved
  6. T3Fonepay-NPCI / NIPL-Nepal Clearing House arrangement — Fonepay-NPCI / NIPL-Nepal Clearing House arrangement — Indian UPI users can pay Nepali merchants via the Fonepay-NPCI arrangement; a cross-border remittance linkage between NIPL and Nepal Clearing House Ltd was operationalised 6 June 2026; outward scan-and-pay by Nepali residents remains restricted by forex rules (asymmetric corridor).retrieved
  7. T3India-Nepal UPI-NPI cross-border link — India-Nepal UPI-NPI cross-border link — Real-time, 24/7 P2P cross-border remittance linkage between India's UPI and Nepal's NPI (via NCHL and NPCI International) went live 6 June 2026 with a select group of participating banks; formal announcement followed 9-10 June 2026.retrieved
  8. T3Nepal remittance corridors — Nepal remittance corridors — Remittances (~quarter of GDP) are dominated by Gulf/GCC corridors (~50% of transfers, Qatar 17.7%), India (14.2%) and Malaysia (9.7%); India-Nepal is among the cheapest South Asian corridors at 1.9% cost.retrieved
  9. T3Nepal-India NPI-UPI remittance corridor — Nepal-India NPI-UPI remittance corridor — real-time bank-to-bank P2P transfers; INR 200,000/transaction no monthly cap India-to-Nepal, INR 15,000/transaction and INR 100,000/month Nepal-to-Indiaretrieved

#

Nepal's fintech market is led by eSewa (~70% market share), with Khalti and IME Pay merging in 2025 to form IME Khalti in a bid to challenge that dominance, while Fonepay remains the dominant PSO/QR network backbone. Consolidation among BFIs (e.g., NCHL's acquisition of NEPS) and a regulatory shift permitting wallet-provider mergers are reshaping industry concentration.

Standing sub-brief · as of 4 July 2026 151 words · last cycle 2026-09-21

Industry Structure & Commercial Dynamics

Nepal's digital-wallet market has long been dominated by eSewa, which holds an estimated 70% wallet market share. The most significant structural response to that dominance came in 2025, when IME Pay and Khalti merged to form IME Khalti, a consolidation explicitly aimed at challenging eSewa's position and approved under NRB's revised Transaction and Settlement Bylaw 2077, which permits wallet-provider consolidation. The merger predates this cycle's trailing-twelve-month commercial-event window for W13 purposes but is recorded here as the market-structure context against which any current or future wallet-sector commercial activity should be read.

Periodic update · new data 2026-09-21

Industry Structure & Commercial Dynamics

NRB's newly-published Fintech Strategy explicitly flags a 'level playing field' sub-pillar targeting fair-competition treatment between bank-owned and non-bank payment applications. This directly addresses a structural fault line in Nepal's payments industry: the differing regulatory and commercial treatment historically applied to bank-affiliated payment products versus independent non-bank wallet and payment-service providers. Secondary commentary singles this sub-pillar out as 'the one to watch' within the broader strategy document, suggesting industry observers regard it as the most commercially consequential element of the framework for incumbent competitive dynamics.

This development sits alongside continuing growth in QR-based payment interoperability: NepalPay QR reached 85 percent of registered merchant penetration by August 2026, with interoperable scans routed through the National Payment Switch rising to roughly one-third of merchant scans, up from approximately 15 percent a year earlier. This growth trajectory is commercially significant for industry structure because it reflects increasing convergence toward a shared interoperable rail rather than fragmented, provider-specific QR ecosystems, which tends to reduce switching costs and lower barriers for non-bank entrants relative to a fragmented-scheme environment.

Read together, the 'level playing field' commitment and the interoperability growth trend point toward a market structure that may be becoming more contestable for non-bank payment providers relative to bank-owned incumbents, though the practical effect of the 'level playing field' sub-pillar will depend on implementing rules not yet published.

Outlook

The key indicator to track is whether the 'level playing field' sub-pillar is translated into concrete rule changes -- for example, equalised access to settlement infrastructure or licensing-fee parity between bank-owned and non-bank payment applications. Continued QR-interoperability growth toward higher merchant-scan shares would further support a more contestable market-structure reading.

1 earlier distinct update(s)
Periodic update · new data 2026-09-14

Industry Structure & Commercial Dynamics

A draft amendment to the Nepal Rastra Bank Act, currently under stakeholder discussion, proposes including payment system operators and payment service providers within the statutory definition of 'financial institution' -- a category that today exists only under the Bank and Financial Institutions Act (BAFIA). This is a structurally significant proposal for Nepal's payment-industry architecture: it would collapse a distinction that has, to date, kept non-bank payment institutions operating under a separate licensing and supervisory track (the Payment and Settlement Act, 2075) from deposit-taking banks and financial institutions governed by BAFIA. Stakeholders participating in the discussion have flagged the risk that reclassification could create a direct conflict between the two statutory frameworks, since BAFIA imposes financial-institution-specific prudential and governance requirements that were not designed with non-bank payment providers in mind.

The practical stakes of this proposal for industry structure are significant precisely because Nepal's payment sector already has a meaningfully developed non-bank component: over 10 licensed payment system operators and 27 licensed payment service providers currently operate under the existing PSO/PSP licensing framework, a structure that has developed specifically because payment institutions were treated as a distinct category from banks. Folding these entities into the BAFIA 'financial institution' definition would represent the most significant structural change to Nepal's payment-industry categorisation since the 2079 (2023) Licensing Policy refresh, and its outcome will shape whether non-bank payment providers continue to operate under a payments-specific regulatory logic or are drawn toward bank-equivalent prudential treatment.

This proposal remains at the stakeholder-discussion stage; it has not been enacted, and its final scope, including whether it applies uniformly to all PSOs/PSPs or is calibrated by size or systemic significance, has not been settled.

Outlook

Watch for whether the draft amendment advances from stakeholder discussion toward formal legislative process, and whether its eventual scope distinguishes between systemically significant payment institutions and smaller non-bank providers. The resolution of the BAFIA/Payment and Settlement Act interaction question will materially shape the commercial calculus for both incumbent and prospective non-bank payment entrants into the Nepali market.

Sources and findings (8)
  1. T3https://www.fiscalnepal.com/2025/03/20/19895/digital-wallet-leaders-ime-pay-and-khalti-merge-to-rival-esewa-begin-dda/retrieved
  2. T3https://www.simpaisa.com/blogs/nepals-digital-payment-boom-2025-market-landscape-and-the-road-ahead/retrieved
  3. T1https://www.nrb.org.np/contents/uploads/2025/01/Payment-Oversight-Report-2023-24.pdfretrieved
  4. T3https://tracxn.com/d/explore/fintech-startups-in-nepal/__qo4iDQXalIFuCA3IWeUyRKA1wbtlrLoEqyealiLmpzAretrieved
  5. T3https://english.onlinekhabar.com/fintech-innovations-transforming-nepals-banking-landscape.htmlretrieved
  6. T2Draft Nepal Rastra Bank Act amendment — Draft Nepal Rastra Bank Act amendment — Proposes including PSOs and PSPs within the statutory definition of 'financial institution', currently a BAFIA-only category, risking conflict between BAFIA and the Payments and Settlements Act 2075.retrieved
  7. T3IME Pay / Khalti merger (IME Khalti) — IME Pay / Khalti merger (IME Khalti) — IME Pay and Khalti merged in 2025 to form IME Khalti, aiming to challenge eSewa's ~70% wallet market share; approved under NRB's revised Transaction and Settlement Bylaw 2077 permitting wallet-provider consolidation.retrieved
  8. T3NRB Fintech Strategy — NRB Fintech Strategy — NRB's Fintech Strategy explicitly flags a fair-competition ('level playing field') commitment between bank-owned and non-bank payment apps.retrieved

Payments-related litigation in Nepal centres on the 2022 Supreme Court dismissal of a PIL challenging NRB's crypto ban, active NRB enforcement actions (licence dismissals, account freezes) against non-compliant PSPs, and an emerging legal-ambiguity dispute over the draft NRB Act amendment that would reclassify PSPs/PSOs as "financial institutions" (with knock-on tax-rate implications).

Standing sub-brief · as of 4 July 2026 210 words · last cycle 2026-11-01

Legal & Litigation

The key litigation anchor for Nepal's payments and digital-asset regime remains the Supreme Court's 2022 dismissal of a Public Interest Litigation that had challenged NRB's crypto-ban notice; the Court held that NRB acted within its statutory competence under specific sections of the NRB Act. This precedent underpins the durability of the crypto/stablecoin ban discussed in W2 and forecloses, absent a change in the underlying statute, straightforward domestic legal challenges to that prohibition.

Periodic update · new data 2026-11-03

Legal & Litigation

Nepal's Supreme Court issued a mandamus order on 9-10 October 2026 addressing the legal status of National ID cards as a basis for bank customer identity verification. The order quashed the provision of Nepal Rastra Bank's Unified/Integrated Directive 2082 to the extent it had made the National ID card or its number the sole basis for verifying a citizen's identity for banking purposes, holding that this requirement shall not be mandatory. The court further directed banks to continue accepting citizenship certificates as an identity-verification document for customers who have not yet received a National ID card, pending completion of the national rollout. The ruling is a judicial check on a prudential regulatory instrument, Nepal Rastra Bank's unified directive, rather than on legislation itself, and it illustrates a court's willingness to intervene where a regulator's identity-verification mandate was assessed as functioning to exclude a population without equivalent access to the alternative document being made mandatory.

The litigation matters beyond its immediate banking-sector effect because it establishes a precedent regarding the limits of regulatory authority to mandate a single identity document as an exclusive basis for accessing a regulated financial service, at least where a meaningful share of the population lacks that document through no fault of their own. For banks, the order is directly operative notwithstanding the absence, as yet, of a corresponding formal amendment to the text of Unified Directive 2082 itself; the mandamus order is binding in its own right regardless of when or whether Nepal Rastra Bank subsequently updates the directive text to match. This creates a legal compliance posture in which banks are expected to follow the court's direction immediately, while the formal regulatory instrument they would ordinarily look to for day-to-day guidance has not yet caught up with that direction in writing.

The case is also notable for what it signals about the interaction between Nepal's national identity infrastructure rollout and financial-sector regulation. By directing continued acceptance of citizenship certificates, the court effectively preserved the pre-existing identity-verification pathway for banking access rather than permitting a transition to the newer National ID system to proceed in a way that would have excluded those not yet issued the new document.

Outlook

The litigation strand to watch is whether Nepal Rastra Bank issues a formal circular bringing Unified Directive 2082's text into alignment with the Supreme Court's order, and whether any further legal challenges arise regarding other provisions of the same directive or similar identity-verification mandates elsewhere in the regulatory framework. The precedent set by this ruling, that a single-document identity mandate cannot be imposed where it would functionally exclude customers lacking that document, may also be relevant to how other regulators approach identity-verification rules as the national identity rollout continues.

1 earlier update recorded under a different module label

An early cycle filed this entry under this module code with a heading naming another subject. Kept for the record; not this module's latest position.

Periodic update · new data 2026-11-04

Regulatory Status

The Supreme Court's mandamus order of 9-10 October 2026 against Nepal Rastra Bank's Unified/Integrated Directive 2082 is the principal legal development of the period for the payments sector. The court ruled against the directive's requirement that the National ID card or number serve as the sole basis for verifying a customer's identity, finding that this could not be made mandatory, and ordered that citizenship certificates and other existing documents continue to be accepted by banks. The order binds banks directly and took legal effect from the date of the ruling, even though broader public reporting followed some two weeks later.

This is litigation with immediate operational consequence rather than a dispute confined to legal process: it directly overrides a standing central-bank directive provision and obliges banks to change onboarding and KYC-renewal practice without waiting for Nepal Rastra Bank to publish its own amendment. The gap between the court's order and any conforming regulatory text is itself a live compliance question for banks acting in the interim.

Outlook

The matter to watch is whether Nepal Rastra Bank issues a formal circular or directive amendment reconciling the Unified Directive's text with the court's order, and whether any further clarification addresses edge cases such as accounts opened or renewed during the window between the ruling and its public reporting. Litigation risk in the sector over the coming cycle centres on consistency of bank practice during this transitional period, rather than on a new line of claims.

Sources and findings (7)
  1. T3https://notarynepal.com/blog/legal-provisions-on-cryptocurrency-in-nepalretrieved
  2. T1https://www.nrb.org.np/contents/uploads/2025/01/Payment-Oversight-Report-2023-24.pdfretrieved
  3. T3https://ekantipur.com/business/2026/03/01/en/draft-amendment-to-the-nepal-rastra-bank-act-proposal-to-include-payment-system-operators-and-service-providers-in-financial-institutions-41-52.htmlretrieved
  4. T3https://jkeconomicassociation.com/consumer-protection-in-the-digital-marketplace-legal-frameworks-courts-and-enforcement-practices/retrieved
  5. T3https://nepaldivorce.com/blog/anti-money-laundering-law-in-nepalretrieved
  6. T3Supreme Court of Nepal — Supreme Court of Nepal — In 2022, the Supreme Court dismissed a Public Interest Litigation challenging NRB's crypto-ban notice, holding NRB acted within its statutory competence under NRB Act Sections 4, 5(d) and 113.retrieved
  7. T1NRB Payment Systems Department — NRB Payment Systems Department — In FY2023/24, NRB dismissed the licences of Mohar Digital Pvt. Ltd. and E-net Payment Pvt. Ltd., and froze the accounts of Paywell Nepal Pvt. Ltd. and Sajilo Pay Payment Services Pvt. Ltd. for non-compliance.retrieved

#

Merchant acquiring runs through NRB-licensed PSPs/PSOs under the NepalQR framework, with acquirers responsible for merchant enrolment, ID assignment and settlement; a 2026 E-commerce Act mandates use of NRB-licensed payment gateways, and a zero-additional-fee rule on domestic card/QR/wallet transactions structurally shapes acquiring economics for the roughly 1.2 million QR-accepting merchants.

Standing sub-brief · as of 4 July 2026 124 words · last cycle 2026-07-04

Merchant Acquiring & Risk

The E-commerce Act 2081 requires online sellers to use NRB-licensed payment gateways or methods, with fines of NPR 50,000 to 300,000 applying for breaches, including unregistered operation or unresolved consumer complaints. This is a structural constraint on merchant-acquiring economics for online sellers in Nepal: it effectively forecloses the use of unlicensed or informal payment-collection arrangements for e-commerce, channelling all online merchant acquiring through NRB-licensed gateway infrastructure.

no periodic updates on record for this sub-brief

Sources and findings (6)
  1. T1https://www.nrb.org.np/psd/consultative-review-document-for-qr-code-guidelines-and-framework-and-qr-code-specifications/retrieved
  2. T3https://www.karsansar.com/e-commerce-act-2081-nepal-guide/retrieved
  3. T2https://nchl.com.np/wp-content/uploads/2023/02/1.pdfretrieved
  4. T3https://ictframe.com/nrbs-notice-on-eps/retrieved
  5. T3https://corporatenp.com/post/fintech-psp-registration-nepalretrieved
  6. T3E-commerce Act 2081 — E-commerce Act 2081 — Online sellers must use NRB-licensed payment gateways/methods; fines of NPR 50,000-300,000 apply for breaches including unregistered operation or unresolved consumer complaints.retrieved

#

Nepal's domestic retail-payments infrastructure runs on NRB's RTGS system alongside private fast-payment operators (fonepay, Nepal Payment Solution's InstaFund) and NCHL clearing. A new NRB directive restricting cash transactions of NPR500,000+ to banking-channel settlement is actively pushing volume toward these digital/account-based rails, and manual cheque clearing is now confined to a narrow high-value band (NPR300m+).

Horizon · 2026-Q4 (± a year)NRB digital-rupee (CBDC) full rollout targetedAdopted, not yet in force · Tier 1 source
Standing sub-brief · as of 4 July 2026 118 words · last cycle 2026-09-21

Product Innovation & Market Development

The standout product development this cycle is the Fonepay-NIPL partnership, which enables Indian UPI users to pay Nepali merchants via QR with instant INR-to-NPR conversion, described in reporting as the first full-scale commercial UPI person-to-merchant deployment outside India. This is distinct from, but complementary to, the bank-channel UPI-NPI person-to-person linkage covered in W5: together, the two initiatives give the India-Nepal corridor both a consumer remittance rail and a merchant-acceptance layer running on real-time infrastructure.

Periodic update · new data 2026-09-21

Product Innovation & Market Development

Nepal's payments-innovation trajectory accelerated materially this cycle across three fronts. First, Nepal Rastra Bank's wholesale central bank digital currency pilot is underway, with a full digital-rupee rollout targeted for 2026, according to remarks by the NRB governor reproduced in a Bank for International Settlements publication -- a Tier-1 source describing the CBDC programme as proceeding in a phased manner toward that full-rollout target.

Second, NepalPay QR reached 85 percent of registered merchant penetration by August 2026, with interoperable QR scans routed through the National Payment Switch rising to roughly one-third of merchant scans, up from approximately 15 percent a year earlier. This reflects a substantial shift toward interoperable, switch-routed QR payments away from closed-loop, single-provider QR ecosystems.

Third, NRB opened its first FinTech regulatory sandbox in early 2026, admitting an inaugural cohort of eight participants of which four graduated over a six-month testing window, covering payments, remittances, credit-scoring and financial-inclusion product concepts. The sandbox mechanism is itself a product-innovation enabler, providing a supervised pathway for novel payment and credit-scoring products to reach limited-scale testing ahead of full licensing.

These three developments -- CBDC, QR interoperability, and the sandbox -- collectively represent the most significant product-innovation activity identified for Nepal this cycle, and they are mutually reinforcing: sandbox-tested innovations may eventually plug into the same National Payment Switch interoperability rail that is already driving QR-scan growth, while the CBDC pilot represents a parallel, centrally-driven innovation track.

Outlook

The principal marker to watch is whether NRB's CBDC pilot progresses from its current phased/wholesale stage toward the targeted full 2026 rollout, and whether QR-interoperability continues its upward trajectory beyond the current roughly one-third merchant-scan share. The second sandbox cohort's composition, once announced, will also indicate whether the regulatory-innovation pace observed in the first cohort is sustained.

2 earlier distinct update(s)
Periodic update · new data 2026-09-05

Product Innovation & Market Development

Nepal Rastra Bank's Payment Systems Department finalised its Guidelines on Regulatory Sandbox, in effect since 14 May 2026, following a draft-consultation period that incorporated stakeholder and international-practice feedback. The guidelines give fintech startups, alongside licensed banks, payment system operators and payment service providers, a controlled environment in which to test new digital-financial-service products ahead of full market launch. This is a concrete, dated product-innovation-policy development rather than a structural market-access change: it creates a testing pathway, not a new licensing category.

Outlook

The practical signal to watch for next cycle is uptake: which institutions, if any, enter the sandbox under the finalised guidelines, and whether any sandbox-tested product graduates to full licensed deployment.

Periodic update · new data 2026-08-11

Product Innovation & Market Development

Nepal Rastra Bank's new cap on cash transactions of NPR500,000 or more, requiring settlement via account-payee cheque or bank transfer from Magh (mid-January 2026), is the most consequential product-development-adjacent signal for Nepal's payments market this cycle. By closing off large cash settlement as an option, the cap is likely to materially increase digital-rail transaction volumes in the near term, benefiting the bank-transfer and account-payee-cheque channels over informal cash settlement, and by extension benefiting the formal rails through which that volume must now pass.

Nepal's domestic retail-payments ecosystem, as documented in NRB's own Payment Oversight Report 2024/25, comprises fonepay direct/IBFT and Nepal Payment Solution's InstaFund as the named fast-payment systems operating alongside NRB's own RTGS and NCHL infrastructure. Both are privately operated systems sitting within the domestic retail-payments layer, and no evidence of consolidation, new entrant activity, or product launch among them was identified this cycle — the ecosystem's structure appears stable even as the cash-cap policy shift is likely to route incremental volume through it. A distinct legacy carve-out persists in cheque clearing: cheques of NPR300 million and above remain manually cleared through NRB rather than through automated rails, an explicit structural exception to full rail automation that the Payment Oversight Report documents as still in place.

Outlook

The principal marker to watch is whether the NPR500,000 cash-transaction cap produces a measurable, quantifiable shift in transaction volume toward fonepay, InstaFund, RTGS, or NCHL channels in reporting following implementation. Whether the NPR300 million manual-clearing carve-out is itself revisited, and whether any new entrant or product launch appears in Nepal's fast-payment layer, are the two further developments to track. No private-company PSP/fintech funding or M&A signal was located for Nepal this cycle, a standing under-indexed vector for emerging-market rails.

Sources and findings (11)
  1. T3https://english.onlinekhabar.com/fintech-innovations-transforming-nepals-banking-landscape.htmlretrieved
  2. T3https://estartupnepal.com/article/electronic-payment-system-in-nepalretrieved
  3. T1https://www.nrb.org.np/psd/retail-payment-strategy-2019/retrieved
  4. T3https://techobserver.in/news/egov/india-nepal-upi-npi-cross-border-payments-launch-325089/retrieved
  5. T3https://sic.gov.lb/en/newsletter/nepal-central-bank-plans-cbdc-within-two-years-crypto-and-stablecoin-still-excluded-saysretrieved
  6. T3Nepal digital-wallet market (eSewa, Khalti, IME Pay, PrabhuPay) — Nepal digital-wallet market (eSewa, Khalti, IME Pay, PrabhuPay) — Nepal's digital-wallet market operates under NRB-mandated interoperability allowing cross-wallet transfers, alongside NRB's Retail Value Payment System covering QR, mobile-banking and USSD-based small-value payments.retrieved
  7. T4USSD-based payment system (Nepal) — USSD-based payment system (Nepal) — USSD-based payments (no internet required) capped at NPR 5,000/transaction and NPR 10,000/day to support financial inclusion for basic-phone users.retrieved
  8. T3Fonepay / NPCI International (NIPL) UPI acceptance — Fonepay / NPCI International (NIPL) UPI acceptance — Fonepay-NIPL partnership enables Indian UPI users to pay Nepali merchants via QR with instant INR-to-NPR conversion, described as the first full-scale commercial UPI P2M deployment outside India.retrieved
  9. T3NepalPay QR — NepalPay QR reached 85% of registered merchants by August 2026; interoperable QR scans via the National Payment Switch rose to roughly one-third of merchant scans, up from ~15% a year earlier.retrieved
  10. T1Nepal Rastra Bank — Nepal Rastra Bank — NRB's wholesale CBDC pilot is underway with a full digital-rupee rollout targeted for 2026, per central-bank governor remarks reproduced by BIS.retrieved
  11. T2Members of Parliament — Members of Parliament — Need for clarity on consumer benefit and transaction security before global digital-payment providers are admitted to the Nepali marketretrieved

#

Consumer protection rests on the general Consumer Protection Act, 2075 (2018) - enforced via a new Consumer Court (established March 2025) - layered with NRB's sector-specific Financial Consumer Protection and Grievance Management Procedure, 2020 and an NRB grievance portal (Gunaso). No dedicated mandatory APP-fraud reimbursement scheme (akin to the UK PSR model) was identified; cyber-enabled fraud (CEF) response instead runs through Nepal Police's Cyber Bureau and FIU-Nepal's STR/SAR analysis.

Standing sub-brief · as of 4 July 2026 161 words · last cycle 2026-07-04

Consumer Protection & APP Fraud

No dedicated mandatory APP-fraud reimbursement scheme akin to the UK PSR model was identified for Nepal this cycle. Cyber-enabled fraud response instead runs through Nepal Police's Cyber Bureau and FIU-Nepal's STR/SAR analysis - an investigative and reporting-based response model rather than a bank-liability redress framework that would compel reimbursement to defrauded customers. This represents a consumer-protection gap relative to the Anglosphere and EU norm of mandatory or presumptive APP-fraud reimbursement, though it should be read as a structural feature of the current regime rather than evidence of any specific unaddressed fraud episode.

no periodic updates on record for this sub-brief

Sources and findings (6)
  1. T3https://commonlaw.com.np/publications/consumer-protection-law-in-nepalretrieved
  2. T3https://jkeconomicassociation.com/consumer-protection-in-the-digital-marketplace-legal-frameworks-courts-and-enforcement-practices/retrieved
  3. T1https://www.nrb.org.np/contents/uploads/2024/11/FIU-Nepal-Strategic-Analysis-Report-2024.pdf.pdfretrieved
  4. T3https://www.nepallawyer.com/blog/social-media-scams-and-online-shopping-scams-in-nepal-lack-of-legislation-on-scams-in-nepalretrieved
  5. T1https://gunaso.nrb.org.np/complainretrieved
  6. T1Nepal APP-fraud reimbursement regime — Nepal APP-fraud reimbursement regime — No dedicated mandatory APP-fraud reimbursement scheme akin to the UK PSR model was identified; cyber-enabled fraud response instead runs through Nepal Police's Cyber Bureau and FIU-Nepal's STR/SAR analysis.retrieved

#

sentinel.position: Nepal was placed on the FATF grey list on 21 February 2025 following an APG mutual evaluation identifying strategic AML/CFT deficiencies. Nepal remains on the grey list as of the June 2026 FATF plenary update, with a 6-point action plan outstanding.

Standing sub-brief · as of 4 July 2026 191 words · last cycle 2026-07-04

AML/CFT & Financial Crime

This module is sourced from the Sentinel.gi feed and is carried here as payments-sector context rather than original WPM illicit-finance analysis. FATF placed Nepal under increased monitoring (grey list) effective 21 February 2025, alongside Lao PDR. Nepal remains on the grey list as of the June 2026 plenary with a 6-point action plan outstanding, marking its second grey-listing after an earlier 2008-2014 stint. On the reporting-framework side, FIU-Nepal's STR/SAR Guidelines, updated July 2025, explicitly cover PSPs/PSOs as reporting entities, and under a 2024 amendment to the ALPA, the FIU may fine up to NPR 10 million for STR non-compliance - extending Nepal's AML reporting regime formally into the non-bank payments sector.

no periodic updates on record for this sub-brief

Sources and findings (13)
  1. T1https://www.nrb.org.np/departments/mlpsd/retrieved
  2. T?FIM (sentinel.gi) per-JID baseline profile — Nepal — Nepal's AML/CFT regime rests on the Asset (Money) Laundering Prevention Act (ALPA, amended 2011-2019), the 2013 Proceeds and Instruments of Crime Act, and DMLI as sole ML/TF investigative authority under NRB supervision. FATF grey-listed since February 2025; EU and UK both list Nepal as a high-risk third country. Major vulnerabilities persist in hundi/MVTS, cooperatives, casinos, real estate, beneficial ownership verification, and virtual-asset enforcement despite a formal VASP prohibition.
  3. T2FIM (sentinel.gi) enforcement_action_register (issue FIM-BASE-ENF-005) — Enforcement: Department of Money Laundering Investigation (DMLI) — Former Finance Minister and UML vice-chair (five-time finance minister)
  4. T1FIM (sentinel.gi) sanctions_change_register (issue FIM-BASE-SANC-002) — Sanctions: OFSI listing
  5. T2FIM (sentinel.gi) enforcement_action_register (issue FIM-BASE-ENF-001) — Enforcement: Department of Money Laundering Investigation (DMLI) / Nepal Police Central Investigation Bureau — Deepak Bhatta, chair of Infinity Holdings
  6. T2FIM (sentinel.gi) enforcement_action_register (issue FIM-BASE-ENF-004) — Enforcement: Department of Money Laundering Investigation (DMLI) — Deepak Khadka, former Energy Minister
  7. T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-003) — Gap: political-constraint
  8. T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-005) — Gap: regulatory-failure
  9. T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-001) — Gap: legal-gap
  10. T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-004) — Gap: capacity-deficit
  11. T3FIM (sentinel.gi) enforcement_action_register — Enforcement action
  12. T1Nepal — FATF placed Nepal under increased monitoring (grey list) effective 21 February 2025 alongside Lao PDR; Nepal remains on the grey list as of the June 2026 plenary with a 6-point action plan outstanding - its second grey-listing after a 2008-2014 stint.retrieved
  13. T1FIU-Nepal — FIU-Nepal's STR/SAR Guidelines (updated July 2025) explicitly cover PSPs/PSOs as reporting entities; under ALPA Section 10(7) (2024 amendment), FIU may fine up to NPR 10 million for STR non-compliance.retrieved

#

Nepali law prohibits foreign bank branch operation, so all cross-border settlement runs through correspondent banking arrangements maintained by Nepal's ~20 commercial banks (several of which are foreign joint-venture banks) with major international banks via SWIFT. The February 2025 FATF grey-listing has intensified de-risking pressure, with heightened due-diligence and documentation requirements on correspondent and trade-finance relationships flagged as an immediate risk.

Standing sub-brief · as of 4 July 2026 182 words · last cycle 2026-09-21

Correspondent Banking, Settlement & Access

The analytical spine of this module is the structural asymmetry between bank and non-bank access to international settlement infrastructure: because foreign banks cannot branch directly inside Nepal, every Nepali commercial bank's cross-border capability - and, indirectly, every non-bank PSP that relies on a bank for settlement - depends on correspondent-banking relationships with foreign banks. Nepal's FATF grey-listing has intensified correspondent-bank de-risking pressure, with heightened due diligence and expanded documentation requirements now attached to correspondent and trade-finance relationships. This is a direct commercial consequence of the W11 grey-listing rather than an independent development, and it is the primary channel through which AML/CFT status translates into day-to-day payments-sector friction.

Periodic update · new data 2026-09-21

Correspondent Banking, Settlement & Access

A cross-border digital payment gateway between Nepal and India is anticipated through collaboration between India's National Payments Corporation of India (NPCI) and Nepal's NCHL and Fonepay. This development remains at the anticipated rather than confirmed-live stage, sourced from a single Tier-3 report, and carries Uncertain confidence accordingly. If it proceeds, it would represent a structurally significant addition to Nepal's cross-border settlement and access landscape, given the volume of remittance and cross-border retail-payment flow between Nepal and India.

The analytical spine for this module is the persistent asymmetry between bank and non-bank access to cross-border settlement infrastructure. A gateway built through collaboration between a national payments-infrastructure operator (NPCI) and Nepal's domestic clearing and switch operators (NCHL, Fonepay) would, if realised, extend interoperable cross-border access beyond what bank-only correspondent arrangements have historically provided, potentially narrowing -- though not eliminating -- the bank versus non-bank access gap for cross-border retail and remittance flows specifically.

No further detail on settlement mechanics, participating financial institutions, or an implementation timeline was available from this cycle's research; the development should be treated as a signal of directional intent between the two countries' payment infrastructure operators rather than an imminent operational capability.

Outlook

The key marker for the coming cycle is any confirmation that the anticipated NPCI-NCHL-Fonepay gateway has moved beyond collaboration discussions toward a defined implementation timeline or pilot. Given the single-source, Tier-3 sourcing on this development, corroboration from a second independent source would also materially raise confidence in this finding.

Sources and findings (7)
  1. T1https://www.trade.gov/country-commercial-guides/nepal-trade-financingretrieved
  2. T3https://risk.lexisnexis.com/insights-resources/article/aml-terror-financing-risks-as-nepal-reenters-fatf-grey-listretrieved
  3. T3https://www.nepjol.info/index.php/JAAR/article/view/90349retrieved
  4. T2https://www.cgdev.org/sites/default/files/policy-responses-de-risking.pdfretrieved
  5. T3https://www.privacyshield.gov/ps/article?id=Nepal-US-Banksretrieved
  6. T3Nepali commercial banks' correspondent banking network — Nepali commercial banks' correspondent banking network — Nepal's FATF grey-listing has intensified correspondent-bank de-risking pressure, with heightened due diligence and expanded documentation requirements for correspondent and trade-finance relationships, since foreign banks cannot branch directly in Nepal.retrieved
  7. T3NPCI-NCHL-Fonepay collaboration — NPCI-NCHL-Fonepay collaboration — A cross-border digital payment gateway between Nepal and India is anticipated via collaboration between India's NPCI and Nepal's NCHL and Fonepay.retrieved

#

The trailing-12-month window (July 2025-July 2026) is dominated by the live cross-border UPI(India)-NPI(Nepal) rail launch (June 2026) via NIPL/NCHL and Fonepay, continuing consolidation momentum from the 2025 IME Pay-Khalti wallet merger, and Nepal's continued FATF grey-list status through the June 2026 plenary - all with significant knock-on commercial implications for payments-sector investment and market structure.

Open gap — wpm-int-3No commercial M&A/investment/product events found for Nepal payments/fintech sector this cycle.no under-indexing note recorded
Standing sub-brief · as of 4 July 2026 133 words · last cycle 2026-10-18

Commercial Intelligence (M&A, Investment & Product)

The standout trailing-twelve-month commercial event for Nepal is the India-Nepal UPI-NPI cross-border real-time payment link, a product launch jointly credited to NPCI International Payments Ltd and Nepal Clearing House Limited. The link went live 6 June 2026, enabling instant P2P transfers via Virtual Payment Addresses rather than correspondent-banking rails that typically take 1-3 business days. Deal terms were not publicly disclosed for this product launch. This is classified here as a discrete commercial/product event distinct from the structural corridor analysis carried in W5, though the two are naturally read together.

Periodic update · new data 2026-10-18

Commercial Intelligence & Fintech

The notable commercial event for Nepal this cycle is the launch of NPL11, a Curacao-licensed online casino and sports-betting platform, which went live on July 19, 2026 and integrated settlement through eSewa and Khalti, Nepal's two leading domestic payment service providers. The vendor's own announcement frames the integration as a user-experience choice, giving players payment methods they already use and trust, but the deal carries no publicly disclosed financial terms: the amount is not publicly disclosed, consistent with a product-release event rather than a funding or acquisition transaction.

This is a discrete commercial event rather than a structural market trend, and it should be read as such: a single platform's product launch and payment-integration choice, not a broader shift in Nepal's fintech or gambling-payments market structure. Its relevance to WPM's commercial-intelligence tracking lies in what it indicates about the willingness or ability of domestic payment service providers to integrate with offshore consumer platforms operating in categories, in this case online gambling, that are not licensed domestically. The specific counterparty-risk and AML implications of that integration are a financial-crime question outside WPM's analytical scope, but the commercial fact of the integration itself, and its implications for how domestic PSPs manage merchant-category onboarding more generally, are properly tracked here.

No other discrete commercial events, funding rounds, or product launches were identified for Nepal this cycle.

Outlook

Whether eSewa and Khalti maintain, modify, or discontinue the NPL11 integration is the item to watch for signal on how Nepal's leading digital wallets manage merchant-category risk for offshore consumer platforms operating outside domestic licensing perimeters. No further product-launch or funding activity is identified in the available material for this cycle.

Sources and findings (8)
  1. T3https://techobserver.in/news/egov/india-nepal-upi-npi-cross-border-payments-launch-325089/retrieved
  2. T3https://www.medianama.com/2026/06/223-india-nepal-upi-payments-live/retrieved
  3. T3https://www.newkerala.com/news/a/nepal-remains-fatf-grey-list-as-global-watchdog-462.htmretrieved
  4. T3https://ekantipur.com/business/2026/03/01/en/draft-amendment-to-the-nepal-rastra-bank-act-proposal-to-include-payment-system-operators-and-service-providers-in-financial-institutions-41-52.htmlretrieved
  5. T3https://thefintechtimes.com/how-fintech-is-growing-in-nepal-in-2026/retrieved
  6. T3Nepal Rastra Bank — Nepal Rastra Bank — NRB's amended Payment Systems Directive imposes background screening on anyone who directly or indirectly owns, controls or acts as ultimate beneficial owner of a licensed payment institution.retrieved
  7. T3NPCI International (NIPL) / Nepal Clearing House Limited (NCHL) — NPCI International (NIPL) / Nepal Clearing House Limited (NCHL) — India-Nepal UPI-NPI direct cross-border real-time payment link went live 6 June 2026, enabling instant P2P transfers via Virtual Payment Addresses rather than correspondent-banking rails that typically take 1-3 business days.retrieved
  8. T3NPL11 — NPL11 — Curacao-licensed online casino/sports betting platform launched July 19 2026, settling via eSewa and Khaltiretrieved
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