The Reserve Bank of India (RBI) announced the launch of the “Indo-Nepal Remittance Scheme” for Nepali migrants in India. This scheme allows migrants, including those who don’t have bank accounts, to send up to Rs. 50,000 (about $1000) in a single transaction. At the receiving end, the scheme allows recipients who don’t have a bank account to receive the transfer through a designated money transfer company. This is indeed welcome news for those interested in reducing the burden on migrants and increasing the development impact of remittances in Nepal!
There is no fee for a bank-to-bank transfer through any Indian commercial bank that participates in the National Electronic Fund Transfer (NEFT) to any bank in Nepal. For receivers who don’t have a bank account, there is a minimal charge of Rs 50 for a Rs 5000 transfer (1 percent of the transfer amount) and a flat fee of Rs. 75 for larger amounts upto Rs. 50,000.
When using the service, Nepali migrants need to produce some form of identification (a passport, driver's license, telephone bill, etc.) in order to comply with Know Your Customer (KYC) requirements. Given of the large number of undocumented Nepali migrants in India, policymakers should ensure that these requirements are inclusive and not become a barrier to limiting the service only to those migrants with legal status.
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