Nepal Rastra Bank (NRB) has announced that customer identification (KYC) will now be conducted using the National Identity Card (NID) starting from the fiscal year 2082/83 (2025/26). This is part of several provisions repeated in this year’s monetary policy, including promotion of a national payment strategy, digital lending, and a regulatory sandbox to foster innovation.
The announcement was made by NRB Governor Bishwanath Paudel during the policy unveiling on Friday, although the live broadcast faced technical disruptions.
One-Time KYC Update Across Banks
According to the policy, once a customer updates their KYC details at one financial institution, the data can be accessed digitally by other banks or financial institutions. This aims to eliminate the hassle of submitting the same documents multiple times.
However, experts suggest that the use of National ID should not be limited to KYC alone—it should also contribute to credit profiling, digital identity, and financial scoring.
“We still lack the basic infrastructure required for true digital financial inclusion,” says fintech expert Vivek Rana. “Rather than a national payment system, we need a unified payment strategy.”
The monetary policy includes revisions to the existing frameworks for digital transactions, payment security, and digital credit disbursement. Notably, it proposes updates to the Digital Lending Guidelines to facilitate collateral-free loans to MSMEs (Micro, Small, and Medium Enterprises) via digital platforms.
Call for Collateral-Free Micro Loans
Founder of Khalti Digital Wallet, Amit Agrawal, stressed the need for policies that allow collateral-free loans ranging from NPR 100,000 to 500,000 for small entrepreneurs and content creators.
“Imagine a content creator needing NPR 50,000 to buy a phone or gear—this type of credit can significantly support Nepal’s creator economy,” he said. “It also helps formalize the informal economy.”
Agrawal also suggested incorporating Buy Now, Pay Later (BNPL) services into the digital credit framework.
Experts further recommend building Digital Public Infrastructure (DPI) to facilitate collateral-free lending using a robust credit scoring system tied to the National ID and digital data exchange.
Digital Finance Innovation Hub Launched
To encourage fintech innovation, NRB has established a Digital Finance Innovation Hub, which will include both government and private sector participation. It aims to support startups and innovators with the necessary regulatory and policy framework.
Forex Exchange Limit Raised for Overseas Travelers
The monetary policy has increased the foreign exchange limit for Nepali citizens traveling abroad (except to India) to USD 3,000 per trip, up from the current USD 2,500.
Special Concessions for Agricultural Loans
To uplift the livelihoods of low- and middle-income families, NRB’s policy introduces special provisions for agriculture and MSME lending. It allows loans of up to NPR 1 million with concessional terms, and grace periods where minimal loan loss provisioning is required.
Loans up to NPR 30 million will also be counted as MSME loans if deployed in targeted sectors. Additionally, the policy simplifies credit procedures for:
- Crops and livestock farming
- Fisheries
- Agricultural machinery production
- Tourism-related activities
- IT-based agri-industries
- Industries using domestic raw materials
As per the policy, banks will now not be allowed to charge more than 2% premium above the base rate for such loans.
Nepal Agricultural Research Council (NARC) will also play a role in recommending specific high-yield varieties eligible for subsidized loans.
As of the end of Baisakh 2082, commercial banks have invested NPR 647.85 billion (13.9% of total loans) in agriculture. Development banks have invested NPR 132.88 billion (26.4% of total loans) in agriculture, MSMEs, energy, and tourism.
Due to the timely onset of monsoon this year, NRB forecasts a rise in paddy and summer crop production.
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