Kathmandu, Aug. 3
Nepali migrant workers with 'work permit' issued by the
Government of Nepal can open Remittance Savings Account in banks in Nepal to
save the money they earn while working in foreign land.
The Nepal Rastra Bank (NRB) announced the policy a couple of
years ago to encourage the migrant Nepali workers to send their earnings
through the formal channel. The Remittance Savings Account offers about 1 per
cent more interest rate than the one given
in other savings product. Currently, Nepali banks are offering up to 9 per cent
interest rate in these accounts.
Customers can open the account with zero balance in many
banks while others demand Rs. 100 as the minimum balance, and a few of them
have a requirement of Rs. 1000. Having an account in Nepali banks also provides
other facilities like applying for the Initial Public Offering (IPO) of various
companies.
Recently the Securities Board of Nepal (SEBON) has also
implemented a policy to set 10 per cent quota for all the IPOs announced in
Nepal for Nepali workers. They can open
Demat and MeroShare accounts and get the mobile banking facility from the
respective bank.
This means Nepali workers can apply for the IPO via online
application system of MeroShare application of the CDS and Clearing Limited.
But Nepali students who are pursuing their higher education
in higher education institutions in various developed countries can't open the
Remittance Savings Account. According to the NRB, this product is exclusively
designed for the migrant Nepali workers flying abroad with the 'work permit'.
However, Nepali students work and earn along with their
studies. Many developed countries allow 20-28 hours work in a week. For
example, Australia has a rule that allows students, including the foreign ones,
to work for 24 hours a week while in
Japan the time is 28 hours for the same period.
Narendra Saud, who is pursuing his PhD at the University for
the Creative Arts in the United Kingdom, said that students, also those who are
at the foreign universities under scholarship programmes, earn a good amount of
money. "My Nepali friends in the UK work and earn. They want to open the
remittance account and make investment in the share markets. It might result in
a good return after five years or a decade," he said while adding that the central bank should allow them to open
the remittance account and make investment in IPOs.
Nepal has been witnessing a growing outflow of students in
recent years with the highest number of Nepali youth – 114,429 – obtaining 'No Objection Letter' from the Ministry of Education,
Science and Technology (MoEST) in the Fiscal Year 2021/22. A decade ago than
that, the number of students obtaining NOC was just 10,324.
Similarly, about Rs. 65 billion is exchanged in various
foreign currencies from the central bank in a year to pay universities abroad.
President of the Nepal Bankers Association (NBA), Sunil KC,
said that including Nepali students in remittance savings account could be a
good step and the issue would be discussed at the forum of his organisation.
"Although the product was especially designed for the
migrant workers, students should also be allowed to send the lawfully earned
money back home," said KC.
The NRB also said that the issue was not in consideration in the policy discussions
conducted by the central bank. However, after a brief talk with The Rising
Nepal, Spokesperson of the NRB, Dr. Gunakar Bhatta, said that the central
bank's attention has been drawn to the issue.
Opening remittance account
To open a Remittance Savings Account in Nepali commercial
and development banks, one needs
personal identification documents like citizenship or passport, work permit, and
a passport size photo. All these documents can be submitted via online
application form of the respective banks.
Likewise, if family members of the migrant worker want to
open this type of bank account, they need to submit the evidence that they
received remittance or a person from the family is employed abroad along with
the citizenship or passport and passport size photo.
Published in The Rising Nepal daily on 4 August 2023.
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