Advertising agencies say the central bank should regulate the payment system.
Nepal Rastra Bank has given up on its plan to license companies to deal with the payment of social media advertisement for the time being as it is content with existing mechanisms.
Early this year, the central bank had directed companies involved in sending foreign currency abroad for advertisements on social media, to route all such payments through the local banking channel.
In a notice, it had stated that any payment outside the local banking channel would be deemed illegal and punishable as per the Foreign Exchange Regulation Act. In response, advertising agencies have demanded a specific policy on how to make payments for foreign services. During a discussion with advertising agencies, the central bank had floated the idea of licensing companies that deal with the payment of foreign currency for social media advertising.
“We had held discussions on the possibility of issuing licenses to certain companies to provide payment service for social media advertising,” said Guru Prasad Poudel, director at the foreign currency management department. “But, we have not moved ahead towards that direction for the time being as existing mechanisms appears to be enough to ensure channelizing of payment of foreign currency through the banking system.”
As per the central bank’s circular, the country’s commercial banks can provide up to $3,000 for service imports against payment in Nepali rupees. The banks can also provide between $3,000 and $10,000 for service imports, based on the recommendation of the regulator for the sector the company is operating in.
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