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Indo-Nepal Remittance Scheme: Limits Raised, Caps Removed

Current · Source: Reserve Bank of India · RBI/2021-22/94 · issued 27 Aug 2021 · ~2 min read

Quick answerRBI has raised the per-transaction ceiling for Indo-Nepal remittances via NEFT from ₹50,000 to ₹2 lakh and removed the annual cap of 12 remittances per remitter, effective October 1, 2021. Cash remittances retain the old limits.

The rule, in the simplest words

Banks can now process larger individual remittances to Nepal, up to ₹2 lakh per transaction.
The annual cap of 12 remittances per remitter has been removed for non-cash transactions.
Cash remittances from walk-in customers still have a limit of ₹50,000 per transaction and 12 per year.
Banks must differentiate between account-based and cash transactions for remittances.

How it plays out — a real example

Ramesh, a forex & trade-finance officer in Indore, is helping a Nepali migrant worker, Rohan, send ₹1.8 lakh to his family in Nepal. Ramesh processes the transaction through NEFT, as it's a larger amount, and Rohan's family receives the funds in Nepalese Rupees through credit to their bank account with Nepal SBI Bank Limited.

What changed

The per-transaction limit for Indo-Nepal remittances under the NEFT-based scheme has been increased from ₹50,000 to ₹2 lakh. The earlier restriction of a maximum of 12 remittances per remitter per year has been removed entirely. For remittances made in cash by walk-in customers, the old ceiling of ₹50,000 per transaction and 12 per year continues to apply.

What it means for you

Banks can now process larger individual remittances to Nepal, which should boost trade-related payments and person-to-person transfers. The removal of the annual cap simplifies compliance and encourages higher volumes. However, cash-based remittances remain tightly controlled, so banks must differentiate between account-based and cash transactions. This change also supports pension and retirement payments to ex-servicemen settled in Nepal.

What you must do

Update NEFT system limits to allow per-transaction remittances up to ₹2 lakh for account-based transfers.
Remove the annual cap of 12 remittances per remitter for non-cash transactions.
Maintain the existing ₹50,000 per transaction and 12-per-year cap for cash remittances from walk-in customers.
Implement velocity checks and risk mitigation measures for the higher limits.
Coordinate with SBI for charges on transactions above ₹50,000 as per their prescribed rates.

Who it affects

All banks participating in NEFT, Remitters sending funds from India to Nepal, Beneficiaries in Nepal receiving through Nepal SBI Bank or agency arrangements, Ex-servicemen settled in Nepal receiving pensions

❓ Common questions

Regulatory timeline

Stated effective date effective October 1, 2021
Decoded by BankPulse 2026-06-18 07:31 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new per-transaction limit for Indo-Nepal remittances?

The limit has been raised from ₹50,000 to ₹2 lakh per transaction for remittances initiated through NEFT, effective October 1, 2021.

Does the annual cap of 12 remittances still apply?

No, the annual cap of 12 remittances per remitter has been removed for account-based transfers. However, it continues to apply for cash remittances from walk-in customers.

What charges apply for transactions above ₹50,000?

For transactions up to ₹50,000, existing charges as per the 2009 circular apply. For amounts above ₹50,000, the charges prescribed by State Bank of India will apply.

📜 Read the original circular — full text as issued by RBI

RBI/2021-22/94
 CO.DPSS.RPPD.No.S475/04.09.003/2021-22
 August 27, 2021
 The Chairman / Managing Director / Chief Executive Officer
 of all banks participating in NEFT
 Madam / Dear Sir,
 Enhancements to Indo-Nepal Remittance Facility Scheme
 The Indo-Nepal Remittance Facility Scheme (Scheme) was launched by the Reserve Bank of India in May 2008 as an option for cross-border remittances from India to Nepal, with special focus on requirements of migrant workers of Nepali origin working in India. The Scheme leverages the National Electronic Funds Transfer (NEFT) ecosystem available in the country for origination of such remittances and entails a ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year. The beneficiary receives funds in Nepalese Rupees through credit to her / his bank account maintained with the subsidiary of State Bank of India (SBI) in Nepal, i.e., Nepal SBI Bank Limited (NSBL) or through an agency arrangement.
 2. A review of the Scheme has since been made and to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal, the following enhancements are announced –
 Increase in the ceiling per transaction from ₹50,000 to ₹2 lakh.
 Removal of the cap of 12 remittances in a year per remitter.
 As hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances.
 The charges for transactions up to ₹50,000 shall continue as provided in circular DPSS (CO) No.1381/04.09.003/2008-09 dated February 09, 2009 . For transactions beyond ₹50,000, the charges prescribed by SBI shall apply.
 The banks shall put in place suitable velocity checks and other risk mitigation procedures.
 3. The enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.
 4. These directions are issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect from October 01, 2021.
 Yours faithfully,
 (P Vasudevan)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/94 · issued 27 Aug 2021. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

🏦 Branch Manager

Maintain the existing ₹50,000 per transaction and 12-per-year cap for cash remittances from walk-in customers.

💻 IT / Systems

Update NEFT system limits to allow per-transaction remittances up to ₹2 lakh for account-based transfers.

📜 Compliance

Remove the annual cap of 12 remittances per remitter for non-cash transactions.
Implement velocity checks and risk mitigation measures for the higher limits.
Coordinate with SBI for charges on transactions above ₹50,000 as per their prescribed rates.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All banks participating in NEFT, Remitters sending funds from India to Nepal, Beneficiaries in Nepal receiving through Nepal SBI Bank or agency arrangements, Ex-servicemen settled in Nepal receiving pensions), your first concrete step on “Indo-Nepal Remittance Scheme: Limits Raised, Caps Removed” is: “Update NEFT system limits to allow per-transaction remittances up to ₹2 lakh for account-based transfers.” (RBI issued this 27 Aug 2021).

Circular: RBI/2021-22/94 -- Indo-Nepal Remittance Scheme: Limits Raised, Caps Removed
Issued: 27 Aug 2021
Action required: Update NEFT system limits to allow per-transaction remittances up to ₹2 lakh for account-based transfers.
Action required: Remove the annual cap of 12 remittances per remitter for non-cash transactions.
Action required: Maintain the existing ₹50,000 per transaction and 12-per-year cap for cash remittances from walk-in customers.
Action required: Implement velocity checks and risk mitigation measures for the higher limits.
Action required: Coordinate with SBI for charges on transactions above ₹50,000 as per their prescribed rates.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12155&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.