Nepal moves to redefine digital payments under NRB law, stirring debate over tax, regulatory overlap
Summary
Nepal is revising the Nepal Rastra Bank Act to redefine digital payment service providers as financial institutions, sparking debate over regulatory overlaps and tax implications.
Key Points
- Nepal plans to amend the Nepal Rastra Bank Act to classify payment system operators (PSOs) and payment service providers (PSPs) as financial institutions.
- The proposed change may cause legal ambiguities between the Nepal Rastra Bank Act and the Payment and Settlement Act, and lead to higher tax rates for digital payment firms.
- Stakeholders fear the amendment could impose banking regulations on digital payment companies, limiting their capital raising flexibility.
- Experts call for clearer legal provisions to support digital banking, including digital identification and coordination with other legal systems.
