Nepal Rastra Bank to Regulate Systemically Important Payment Systems

Kathmandu, April 19, 2025: Nepal Rastra Bank (NRB) has announced plans to specially monitor and regulate systemically important payment systems (SIPS). The central bank has prepared a draft of the “Framework for Identifying Systemically Important Payment Systems” and sought feedback from stakeholders.

Aim to Streamline and Reduce Risks in Payment Systems

NRB stated that the framework aims to make payment systems more efficient, swift, and less prone to risks. Currently, payments are facilitated through banks, financial institutions, payment service providers, and system operators using tools like Real-Time Gross Settlement (RTGS), Connect IPS, checks, debit/credit cards, mobile banking, and QR payments. Disruptions in these systems could impact the entire financial ecosystem and raise concerns about financial stability, necessitating specific regulatory measures, according to NRB.

Separate Regulation for High-Risk Systems

The central bank plans to create a separate list of payment systems that handle large transactions, hold significant market share, or pose substantial risks to the financial system. These systems will be regulated in line with international standards. The draft highlights that disruptions in such systems could have widespread effects on the financial sector. It also emphasizes identifying various risks in payment systems, monitoring their origins, and tracking their potential spread.

Focus on Risk Management and Effective Oversight

The draft outlines plans to assess risks in payment systems and develop mechanisms for effective monitoring, management, and control. By identifying and regulating systemically important payment systems (SIPS), NRB aims to minimize the risk of disruptions. Stakeholders have been invited to submit feedback on the draft by May 18, 2025.

A Key Step Toward Financial Stability

Experts note that disruptions in payment systems could significantly undermine financial stability. The special regulation and monitoring of such systems are expected to enhance the reliability and stability of the financial sector. NRB’s initiative is seen as a positive step toward managing risks while supporting the expansion of digital payments.