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Electronic Banking in Nepal
Electronic banking in Nepal allows customers to conduct transactions online without visiting banks, using the internet for services like fund transfers and bill payments. Although e-banking is still in its infancy in Nepal, with low internet banking usage and significant reliance on traditional banking methods, services like eSewa have improved payment convenience since its launch in 2009. Many banks offer internet banking mainly in urban areas, but security concerns and limited knowledge hinder wider adoption among the population.
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Electronic Banking in Nepal
- 1. Electronic Banking inNepal Mr. Roshan Bhattarai Kathmandu, Nepal
- 2. Electronic Banking • E-bankingis a process by which – a customer performs banking transactions electronically – without visiting the physical premises of the financial institutions • It uses the internet as the delivery channel – to conduct banking activity for eg transfer funds, paying bills etc. • Banking activities conventionally done by visiting a bank – can now be done through a computer with internet access • Service production and service delivery will be fully automated, – which significantly lowers per unit cost associated with high volume transactions
- 3. History of E-bankingin Nepal • Establishment of Nepal Bank Limited in1937 – as a first bank of Nepal • After almost 53 years credit card is introduced by The Nabil Bank Ltd in early 1990s • Establishment of first ISP (Mercantile office systems) took place in 1994 • Automated Teller Machine (ATM) and Telebanking was introduced The Himalayan Bank Ltd in 1995 and 1997 respectively • IT policy was formulated in the year 2000 • The Kumari Bank Ltd started Internet banking in 2002 • The Laxmi Bank Ltd introduced SMS Banking (Mobile Banking) in the year 2004 • Electronic transaction and digital signature Act was revised on 2005
- 4. • Internet bankingis still not much popular in Nepal, – people still rely on traditional ways of banking – Lack of knowledge of internet and digital technology might be the reason • Major cities like Kathmandu, Biratnagar, Pokhara, Birjung have good internet facilities • Majority of the banks provides the internet banking in urban cities – but it is in its early stage and is not utilized by most of the bank’s customers. • Few e-banking frauds have been found yet, • E-banking is in its infancy right now, it means the system is not perfectly secure and precautions must be taken.
- 5. • The NationalCyber Security Index 2020 ranks Nepal 93rd out of 100 – Ability to prevent cyber threats and manage unintended cyber incidents is poor • The Internet penetration is 72.22% of the total population in 2020 • 61% population without bank account (April, 2020) • 3,34,11214 bank accounts (April, 2020) • 9,92,724 internet banking users in Nepal (April, 2020) • 1,06,70,072 mobile banking users in Nepal (April, 2020) • 72, 43, 153 debit card users (April, 2020) • 1,56, 749 credit card users (April, 2020) • 65,530 pre-paid cards (April, 2020) • 3945 ATMs (April, 2020) • 40 lakhs people are estimated to use mobile wallets by mid 2020 • Payment Service Providers (IME Digital Solution, E Sewa Fonepay, CG pay Nepal, Nepal Pay Time, Smart Card, Mohar Dgital, Q pay, Pay Nep, Sparrow pay, Cellcom etc)
- 6. Current channels ofe-banking in Nepal • ATM (Cash withdrawals, balance and statement inquiry etc) • ECC (Electronic Cheque Clearance) by NCHL • Point of Sale -PoS Machine (financial transactions through cards) • Telephone Banking (Balance inquiry, account status check etc) • Mobile banking (SMS alerts for deposits, withdrawals and account status) • Internet banking/online banking (funds transfer within accounts, utility bill payments, get statement online, recharge NTC and eSewa accounts, request checkbook etc) – IPS( Interbank Payment System), SWIFT (Society for worldwide Interbank Financial Telecommunications) • Mobile (digital) wallet (Esewa, Khalti, Prabhu pay etc to load money from bank account and use it for payment of goods or services)
- 7. Few general precautionswhile using e-banking facilities: • Never give your cards or card number to anyone • Don’t use public computer for e-transactions • Don’t give your information to unknown websites • Use passwords which are difficult to guess • Regularly check your account status • Inform your service provider if you feel something wrong/abnormal • Change PIN or password regularly • Set few incorrect password submissions options • Never click embedded links in email, social sites carelessly • Don’t transfer funds without verification of the recipient • Don’t store password or other sensitive information in written form
- 8. About eSewa • eSewais a secured online payment service (digital wallet) offered by F1Soft International Pvt Ltd. • Founded by Mr. Himal Niraula and Biswas Dhakal • Objective of eSewa is to allow payment of bills to various merchants or companies from one place • This saves from travelling to each company and wait in long lines to pay your bills • In addition, the payment is done through secured channel – without exposing bank account or card number to the company where you want to pay your bills to • It is in operation since 2009 and – has recently been licensed by Nepal Rastra Bank as Payment Service Provider
- 9. • Customers canregister and get mobile money account instantly – cash-in to their wallet from Agents and partner banks and – start making payments • Customers can pay for utilities, recharge their mobile, pay internet bills, EMI payment, buy airlines ticket, school fees, credit card bills, etc. from their mobile • Merchants, service providers and retail outlets can receive payments for goods and services in their wallet instantly • Enables hassle-free, secure and immediate payments from customers • eSewa App is available for both iOS and Android devices and its primary web portal is www.esewa.com.np.
- 10. • eSewa doesn’tcharge any amount from your bank account when you transfer funds to eSewa account • However, it does charge fees in other cases such as – receiving payments for goods and services or – receiving payments made using debit or credit cards • Today, over 800,000 registered eSewa customers access the wallet services either through the web or their mobiles
- 11. SECURITY • eSewa issecured by 128 bit VeriSign SSL Certificate, – which means personal information like user id and password, and – the information about your transactions – are encrypted before being transmitted through the internet • When you deposit/transfer funds from partner banks to eSewa, – communication between the bank and eSewa is carried out via secured VPN connection – All the data are stored in state-of-the-art data center • https://esewa.com.np (secure hypertext transfer protocol) • Valid mail id and Mobile number is used for identification • Regulated by the Nepal Rastra Bank’s rules and regulations
- 12. Some services offeredby eSewa: • 1.Fund transfer (between eSewa users) • 2. College/School fee payment • 3. Buying Movie tickets online • 4. Buying Air tickets • 5. Online Shopping • 6. Recharges and Top Ups • 7. Paying utility bills like Internet bill, Electricity bill, TV payment, Khanepani bill etc • 8. Credit card payments • 9.Online study (Midas e-class, loksewaguide.com, bookworm.com.np etc) • 10. Insurance Premium/EMI • Subscriptions of Newspapers and Magazines etc
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