6 Major Impacts of Increased Limitation over Online Transactions

January 6, 2020 | DWAIPAYAN REGMI

Nepal Rastra Bank has increased the limit for its electronic transactions. With the increase over the limit, there certainly appears an impact on the entire economy as a whole. Here we discuss the impacts that are created by electronic transactions limit.

Fostering electronic transaction is a way to move upward. The banking practice, which began from the register trend is now up with electronic transaction practices. One should not visit the bank at all for a large number of transactions. It is agreeable that this increment in limit is directly linked with an increased level of fraud. Or, the mistakes are likely to trouble at large scale, as an effect of unawareness thereby. Here are major impacts that can be noticed from this recent decision of Nepal Rastra Bank

1) Promotion of Cashless Economy

This is global support for the promotion of a cashless economy. So, while the neighboring nation has been working ahead with the cashless economy with all its effort, the minimum transaction limit had always been trouble in the Nepalese financial system. Understandably, there are risks associated with rapid rise, but a step taken for upliftment at this small scale is equally appreciable hereby.

2) Ease in customer’s banking operation

Although banks and financial institutions have reached remote regions of Nepal, still there are efforts to be made for regular banking services. Here, this incremental amount of limit will reduce a large number of people to walk miles to obtain the service. Generally, people in hilly remote regions visit banks for the sake of money transfer, or remittance collection. This can now be done from their home itself.

3) Minimizes use of the third party

One significant reason why third-party apps like Connect IPS, Esewa or Khalti had been gaining popularity is through the competitive advantage that they gained comparing to Mobile Banking App. Mobile Banking App had to restrict itself in such a transaction. Or, even while Internet Banking had been with a wider range, the mobile banking app was limited to a few thousand. This growth will automatically reduce the use of third party apps – and hence will be used only when necessary.

4) Increased usages in Mobile Banking and ATM 

At the current picture, mobile banking forms and ATM forms are attached with Account Opening form itself. But, this had been used for small domestic transactions itself. People still prefer cheques over ATM cards or online banking in the professional world. Here, this decision will certainly impact the use of online means for fund transfer and other activities. Maybe in less quantity – but with increased limit – it will certainly be over the rise.

5) High Alert in the IT Department

Be it in the regulatory body’s IT department, or bank’s IT Department – they will have to stay at a high alert zone. Increased limit is increased risk there itself. They will have a tough time monitoring transactions regularly from here. Does this sound hectic? Ah, that’s their work anyway! There will certainly appear more cases of mistakes, or even frauds.

6) Lowers down the operating expenses of a bank

When customers don’t gather and make a crowd in banking, rather operate from their home itself – it won’t just reduce workflow in the banking industry but will count around in reduction of operating costs of banks too. From the cost of voucher, cheque, to staff – they will be lowered all influencing in decreased operating expenses around.


This move of increased limit formulated by Nepal Rastra Bank is appreciable. However, customers must be aware of the issue. Education about how to use it correctly should be conducted wisely. Meanwhile, growth in online banking is additional revenue for banks too.


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