Kathmandu — Nepal Rastra Bank has introduced stricter regulations and greater clarity in the operation of electronic payment cards by issuing the Unified Directive on Payment Systems, 2082.
The revised directive consolidates and updates earlier instructions issued on February 23, 2081 (BS), along with subsequent circulars. It applies to institutions licensed to carry out payment-related activities.
Exercising its authority under Section 45 of the Payment and Settlement Act, 2075 (BS), the central bank has outlined clear policy, operational, and security standards governing electronic payment cards, including credit, debit, and prepaid cards.
According to the directive, institutions must formulate and implement necessary policies approved by their board of directors before issuing any electronic payment cards. Additionally, standards related to service operations, security, and risk management must be regularly updated in line with instructions issued by the central bank from time to time.
The directive also introduces differentiated provisions regarding card issuance based on institutional classification. Class ‘A’ banks, as well as nationally operating Class ‘B’ and ‘C’ financial institutions, are permitted to issue all types of cards—credit, debit, and prepaid. However, non-national level Class ‘B’ and ‘C’ institutions, along with Class ‘D’ institutions, are restricted to issuing cards other than credit cards.
Similarly, payment service providers other than banks and financial institutions are allowed to issue only prepaid cards denominated in Nepali rupees for domestic use.
The central bank has also stipulated that more than one card of the same type cannot be issued from the same account to a single individual, although this provision does not apply to certain specialized card schemes. Institutions are required to provide clear information about different card schemes to ensure customers can make informed choices.
In terms of customer protection, the directive mandates that issuers must enter into formal agreements with customers at the time of card issuance. These agreements must clearly outline service fees, transaction limits, cash withdrawal and payment ceilings, interest rates (in the case of credit cards), payment deadlines, penalties, and other relevant details.
Customers must also be informed about secure transaction practices, procedures for reporting lost or stolen cards, service suspension processes, and any additional benefits associated with the card.
Furthermore, institutions are required to notify customers at least 15 days prior to the expiration of their cards via SMS or other electronic means.
Regarding transaction provisions, electronic payment cards may be used to check account balances and transaction details, as well as to conduct cash transactions through ATMs and cash deposit machines.
The directive also makes it mandatory that all transactions conducted within Nepal in Nepali rupees using electronic payment cards must be settled domestically. In cases where international switches are used, any required guarantees or bonds must be issued in Nepali rupees. Foreign exchange-related transactions will be governed by separate directives issued by the central bank’s Foreign Exchange Management Department.
Nepal Rastra Bank expressed confidence that the new directive will contribute to making the digital payment system more secure, transparent, and well-regulated.
