Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal recorded a significant remittance inflow of Rs 13.56 trillion over the first 10 months of the fiscal year 2081/82 (2024/25), with Rs 1.65 trillion entering in Baishakh 2082 alone, according to Nepal Rastra Bank (NRB). If this trend continues through Jestha and Asar, the total remittance for the year is projected to reach Rs 16 trillion, surpassing last year’s Rs 14.45 trillion, as per NRB data. Over the past five years, remittances have grown by 64.37%, rising from Rs 8.79 trillion in 2075/76 to Rs 14.45 trillion by 2081 Asar.
However, this growth contrasts with a sharp decline in remittance companies. In 2075/76, 52 companies were operational, but by 2081 Asar, only 24 remain licensed, a drop of 28, with two additional companies’ licenses expired and unrenewed. This reduction has sparked concerns about the impact of NRB’s stringent capital requirements.
Nepal Money Transfer Association Vice President Sanjay Sigdel attributed the closures to mandatory capital hikes, with the paid-up capital rising from Rs 2 crore to Rs 10 crore.
NRB has mandated further increases: Rs 3 crore by 2081 Asar, Rs 4 crore by 2082 Asar, Rs 6 crore by 2083 Asar, Rs 8 crore by 2084 Asar, and Rs 10 crore by 2085 Asar. Sigdel noted that companies holding licenses without significant operations—renewable for just Rs 21,000 annually—chose not to comply. “Those who didn’t bring dollars or operate closed down due to their own shortcomings,” he said.
An anonymous operator added that the Rs 10 crore requirement offers little return, leading to closures, especially for firms with weak past performance. NRB’s Foreign Exchange Management Department Chief Rewati Nepal countered that capital hikes aren’t the sole reason, citing operational challenges.
“Small companies struggle to expand, and foreign firms prefer dealing with large banks or established remittance companies,” Nepal explained. He added that non-payment of loans and blacklisting also contribute to closures, not just capital mandates.
The decline raises questions about balancing remittance growth with a sustainable company ecosystem, as policymakers weigh future regulations.
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