UPI-NPI Corridor Live: India-Nepal Real-Time Remittance System Explained

UPI (Unified Payments Interface) is India’s real-time payment system, developed and managed by the National Payments Corporation of India (NPCI). Launched in 2016, UPI allows instant money transfers between bank accounts through a mobile application using a Virtual Payment Address (VPA) or registered mobile number — without sharing bank account numbers or IFSC codes. It has become the backbone of India’s retail digital payments ecosystem, processing billions of transactions monthly.

NPI (National Payments Interface) is Nepal’s consolidated, open API-based digital payment platform operated by Nepal Clearing House Ltd. (NCHL) — promoted by the Nepal Rastra Bank (Nepal’s central bank) along with commercial banks. NPI provides access to the Interbank Payment System (IPS) and the Retail Payment Switch (RPS), enabling real-time payments across participating institutions. NCHL also operates 10+ national payment infrastructures including connectIPS, NEPALPAY QR, CORPORATEPAY, and the National Payment Switch (NPS).

Unlike UPI — purpose-built as a consumer overlay — NPI functions as a technical integration layer consolidating multiple existing Nepali payment rails. Their linkage required NIPL and NCHL to build a cross-border API bridge, branded as “NPIx” on Nepal’s side, enabling real-time interoperability between the two sovereign payment ecosystems.

The corridor was implemented through a partnership between NPCI International Payments Ltd. (NIPL) — the international arm of NPCI — and Nepal Clearing House Ltd. (NCHL).

NIPL was established specifically to export India’s UPI and RuPay payment technologies abroad. It manages bilateral and multilateral linkages with foreign payment systems and works within partner countries’ central bank regulatory frameworks. For the Nepal corridor, NIPL coordinated with both the RBI and Nepal Rastra Bank (NRB) to set the regulatory architecture and transaction limits.

The launch was jointly inaugurated by EAM S. Jaishankar (India) and Foreign Affairs Minister Shisir Khanal (Nepal), who visited New Delhi at Jaishankar’s invitation. The same occasion also witnessed the signing of an MoU between Digital India Bhashini and Kathmandu University for co-creating a “Voice First” language translation platform.

The UPI-NPI corridor is fully bilateral: Indian and Nepali users in India can send money to Nepal using the recipient’s mobile number or VPA, and Indian users in Nepal can transfer funds back. No sensitive bank account details need to be shared — all routing happens through the payment address.

Users of major non-bank UPI apps — Google Pay, Paytm, and PhonePe — can also use the corridor, provided those apps are linked to a bank account.

• Transaction limit: Up to INR 2,00,000 (₹2 lakh) per transaction; no monthly cap.
• Settlement: Real-time; recipient receives funds within seconds.
• Currently live through 8 Nepali banks in Phase 1.

Banks enabled for sending AND receiving: Everest Bank, Global IME Bank, Machhapuchchhre Bank, Nabil Bank, Nepal SBI Bank.

Banks enabled for receiving only (Phase 1): Himalayan Bank, NMB Bank, Siddhartha Bank.

Nepal Rastra Bank has confirmed efforts to onboard all banks and financial institutions in subsequent phases. Phase 1 covers person-to-person (P2P) transfers only.

Nepal is one of the world’s most remittance-dependent economies. Remittances constituted approximately 26.6% of Nepal’s GDP in 2023 — around USD 11 billion — surpassing the combined total of official development assistance and FDI. In FY 2024–25, Nepal received Rs 1.72 trillion in remittances (19% YoY growth). In just Q1 of FY 2025–26 (mid-July to mid-October 2025), inflows surged 35.4% to Rs 553.31 billion.

India is a major source country for Nepal-bound remittances given the two nations’ open border and the large population of Nepali migrant workers in India’s construction, hospitality, and informal sectors. Over 7% of Nepal’s total population was estimated to be working abroad as of 2023.

Before this corridor, many Nepali workers sent remittances through hundi — informal, trust-based hawala-style transfers — because bank transfers were slow, expensive, and inconvenient. The global average cost of sending USD 200 through formal channels is about 6.24%; digital transfers can reduce this to as low as 0.3%. The corridor is therefore expected to shift significant volumes from informal to formal, traceable channels — also helping Nepal comply with FATF norms. Nepal was on the FATF grey list from 2008 to 2014 partly due to concerns about informal money transfer systems.

The UPI-NPI P2P launch is the latest in a sequence of milestones:

• March 2024: Cross-border QR payments launched — Indian tourists can scan NEPALPAY QR codes using UPI apps in Nepal. The reciprocal facility (Nepali citizens scanning in India) remains unavailable as of mid-2026.
• February 2026: Nepal Rastra Bank Governor Vishwanath Paudel and RBI Governor Sanjay Malhotra met in Mumbai, exploring mechanisms for bulk digital transfers of Indian rupees between banking systems.
• 2026: NCHL announced a cross-border digital payment linkage between Nepal and Sri Lanka — pointing to a regional pattern of payment-system integration led by NCHL.
• NCHL also operates cross-border QR payments with 17 international mobile wallets via a partnership with Alipay+.

The same occasion as the UPI-NPI launch saw an MoU between Digital India Bhashini and Kathmandu University for a “Voice First” AI-powered language translation platform — signalling that India’s digital public infrastructure diplomacy extends beyond payments.

As of June 2026, UPI is accepted for payments (merchant or P2P) across nine countries: Bhutan, Singapore, UAE, France, Mauritius, Qatar, Sri Lanka, Cambodia, and Nepal.

However, not all UPI international linkages are equal. There are two types of UPI international presence:

• Merchant/QR acceptance only — Indian travellers can pay local merchants in that country using UPI. No P2P remittance system.
• Payment-system-level P2P linkage — The two national payment infrastructures are directly interlinked for person-to-person transfers. This deeper integration exists only with Singapore (PayNow) and Nepal (NPI).

Singapore’s UPI-PayNow corridor was the world’s first bilateral system-level P2P link, co-supervised by MAS and RBI. As of July 2025, it had expanded to 19 Indian banks. Bhutan was the first country outside India to adopt UPI (2021) — for QR-based merchant payments, leveraging the fact that the Bhutanese Ngultrum is pegged to the Indian Rupee.

With the June 2026 launch, Nepal becomes the second country with system-level P2P connectivity with UPI — a distinction that carries more weight than simply being one of the nine countries where UPI is accepted.

The corridor’s primary social impact targets informal-sector Nepali workers in India who previously had no convenient formal remittance channel. Workers can now send money through mobile apps without visiting a bank branch, navigating foreign exchange counters, or paying agent commissions (typically 2–5% in formal channels, exceeding 20% in low-mobility corridors).

For the regulatory environment, formal tracking of India-Nepal remittance flows will improve substantially. Nepal Rastra Bank spokesperson Guru Prasad Paudel stated the system would “discourage informal and illegal money transfer networks such as hundi while providing greater security for migrant workers’ earnings.” The shift also improves Nepal’s data on migration and remittance flows — important for its sovereign credit profile and compliance with international AML (Anti-Money Laundering) standards.

For Indian merchants near the border, the corridor also eliminates friction from the long-standing ban on Indian currency notes above INR 100 within Nepal — cross-border digital transactions bypass this restriction entirely.

The old Indo-Nepal Remittance Facility (launched by RBI in May 2008) was a one-way, India-to-Nepal-only system. The UPI-NPI corridor replaces it with a fully bilateral, real-time, mobile-first infrastructure.