Nepal Rastra Bank sets out a five-year fintech strategy

What happened

The framework was prepared by NRB's Payment Systems Department, the part of the bank that licenses and oversees payment companies. It fits on a single slide. Its vision is a trusted, innovative and inclusive digital financial system that supports financial inclusion and economic development in Nepal. Its mission is to promote responsible digital financial services through enabling policy, effective regulation, resilient digital infrastructure, collaboration and oversight.

The document lists five objectives. They are: widening the reach of digital financial services through policy reform, encouraging competition in the financial sector, expanding the choice of financial services, addressing risks to financial stability, and using innovation to lower the cost of financial services. It names its target groups as licensed institutions, existing and emerging fintech companies, and users of digital financial services, with special focus on youth, women, children, rural people, gig workers and small businesses.

Only this framework is public. It contains no numerical targets, deadlines, budgets or new rules on wallet limits, fees or licensing. In general, NRB turns such strategies into practice through separate directives, circulars and guidelines. None of these had been issued with the framework, so the details that companies and engineers will actually work to are still to come.

The engineering behind it

The first pillar is infrastructure development. It has two parts: modernising digital infrastructure, and regulatory and supervisory technology. As general knowledge, regulatory technology means software that helps companies follow rules automatically, for example by checking transactions or producing reports. Supervisory technology is the same idea used by the regulator itself, so it can collect and analyse data from many institutions quickly instead of reading paper reports.

The second pillar covers policy, regulation and governance. One sub-pillar asks for a level playing field among fintech players. Another asks for resilient systems and secure delivery of digital financial services. In engineering terms, resilience means a payment system keeps working, or recovers fast, when a server fails, a network link drops or an attack happens. Secure delivery means protecting accounts, data and transactions from fraud and misuse.

The third pillar is the fintech ecosystem. Its sub-pillars include better product offerings, support for innovation, digital financial literacy, coordination among regulators, and building the regulator's own capacity. The expected outcome uses the word interoperable. In general, interoperability means systems from different companies can exchange payments and data using shared standards, so a customer of one wallet or bank can pay a merchant served by another.

These goals match risks NRB has already described. Its Payment Systems Oversight Report for 2024/25 warned that fast, connected digital payments increase exposure to cyber risk and money laundering. It noted cases in which digital payment platforms were misused for gold smuggling and similar crimes, and asked payment institutions to strengthen system design, remote customer onboarding and transaction monitoring. NRB has also issued guidelines on the responsible use of artificial intelligence by its licensed institutions.

What it means in Nepal

Digital payments are already widespread. NRB's oversight report says wallet users grew from 8.88 million in mid-July 2021 to 26.76 million in mid-July 2025. Mobile banking users reached 27.74 million in fiscal year 2024/25. The report calls QR code payments the most widely used retail payment method that year, and says about 2.9 million merchants in Nepal accept QR payments.

The same report shows the strategy did not start from nothing. It says NRB had already done preparatory work toward a regulatory sandbox, a controlled space where new financial products can be tested under supervision. It also institutionalised a Digital Finance Innovation Hub during 2024/25, which gives non-binding guidance to innovators. The new framework places these efforts under one five-year plan. The market is also changing shape. The report records the merger of two payment service providers, IME Digital Solution and Khalti, in June 2025, and the cancellation of two other providers' licences the same month.

Interoperability is also being built at the national level. The oversight report says a National Payment Switch is being developed through Nepal Clearing House Limited (NCHL). Its retail payment switch has been working since November 2021, and a cross-border switch already lets Nepali merchants accept QR payments from systems such as India's Unified Payments Interface (UPI), WeChat Pay and Alipay. One operator has approval to let customers of its partner banks pay merchants in India by scanning UPI QR codes.

For software engineers, the framework points to the kind of skills that payment work needs: secure system design, application programming interfaces (APIs) that let systems talk to each other, careful data handling, and the ability to build software that meets rules and produces audit records. The detailed directives, when they appear, will set the actual technical requirements. Engineers in this field read regulation as closely as they read code.