How To Transfer Money To And From Nepal

How To Transfer Money To And From Nepal


Remittance accounts for over 29% of the Nepali GDP, making it one of the biggest income sources for Nepali people. The number of immigrants from Nepal continues to increase, and with it—the need to transfer money.

Due to the lack of free international payment systems in Nepal, many migrants find it difficult to transfer money to and from Nepal. The procedure is quite simple but might look very complex to many. So, in this article, we will attempt to inform you about the methods, and considerations while transferring money in Nepal.

Channels you Can Use to Transfer Money

How To Transfer Money To And From Nepal

There are several ways to send and receive money in Nepal, and you should use the one that suits you best. Each method has its own share of merits and demerits, which is laid out below.

International Bank Transfer

How To Transfer Money To And From Nepal

This is certainly the most straightforward method but does have some prerequisites. If your bank or a bank near your location abroad is in the international banking network, you can send money to a recipient’s account here in Nepal directly. There will be some associated fees, and it might take a few days to transfer.

If you want to transfer money through this method, firstly you will need the swift code of the recipient bank. Here is a list of the swift codes of common Nepali banks. Contact your bank abroad for associated fees regarding international inter-bank transfers. If you want to send money out of Nepal, banks typically charge a 0.10% rate on the amount of money going out. In this case, too, you will need the swift code of the recipient bank. You will also have to fill up relevant KYC information.

Remittance Company

How To Transfer Money To And From Nepal

Several international and national remittance companies also offer services migrants can make use of to transfer money into Nepal. Some examples of this are World Remit, Xoom, ThamelRemit, Western Union, and so on. These companies provide ease of access since you don’t need a bank account to receive money. The time of transaction is also typically lower when you make use of these companies, as opposed to a bank transfer.

Some companies like ThamelRemit don’t charge ani extra fees at all, although relevant government taxes will have to be paid. Others, like the Western Union, will charge a tiered fee according to the amount of money you need to send.

Sending Through an Individual

How To Transfer Money To And From Nepal

You can also send money through a trusted individual granted that the amount of money is significantly low. Be mindful that this method isn’t exactly legal, and more dangerous too. You always run the risk of losing money, so the person that is transferring needs to be someone you can trust wholeheartedly. Even so, many people choose this method for small amounts of money to avoid extra charges and hassle.

Hundi Transfer

How To Transfer Money To And From Nepal

This method is widely used in Nepal, although it is illegal. Hundi transfer basically means transferring money through channels not approved by the government of Nepal. This method is used by migrants to send money without extra fees and relevant taxes. Businesses have also been found using these illegal channels to evade taxes. For an individual, there is the trust factor again, and you need to consider the risk involved in the process. Overall, we do not recommend this method, even though it may sound tempting at a glance.

Transferring money this way typically takes around a week, and up to a month depending on the dealer, you decide to use. Be informed that this method is not free, but is relatively cheaper than bank transfers, especially for a large sum of money.

Comparing Remittance Charges in Nepal

As mentioned above, for bank transfers, the rate is usually around 5-10% of the money to be sent. Since this rate depends on the bank in Nepal, as well as the bank abroad, we cannot provide you with a specific value for each bank worldwide.

Remittance companies, however, have universal charges. According to the World Bank’s data, the charges for sending money to Nepal from the US are as follows:

Firm NameFeeTotal charge (in %)
Muncha0.002.29
Ria3.003.17
World Remit2.993.60
Thamel Remit3.003.79
Small World5.994.20
Sigue Money Transfers3.994.31
MoneyGram4.994.36
Prabhu Money Transfer5.004.71
Xoom4.995.55
Walmart2World8.006.36
Western Union8.007.45

The list has been ranked in the order of the charges in percentage. Please be informed that this data is relevant for a relatively small amount of money (USD 500-1000).

What are the Associated Risks?

How To Transfer Money To And From Nepal

Money is a sensitive matter, and simple errors can lead to lifelong regrets. When it comes to money transfer, hence, trust is the key. You need to have a medium that you can completely trust.

Hundi Transfers/ Unauthorized Channels

Since Hundi transfers, and sending money through individuals aren’t official methods of sending money, you run a high risk of losing your money or at least going through the extra hassle. If a government authority is notified of hundi transfers, your money will most likely be confiscated too. Hence, these methods are not recommended to use when transferring money from abroad.

Bank Transfers/ Remittance Companies

If you want your money to reach safely, bank transfers are definitely the safest method. There are hardly any fluctuations in service, and holding banks accountable is easier. remittance companies are also fairly reliable, especially if they are associated with a Bank in Nepal. All the companies listed above have been proven to provide consistent money transfer services. If you are using other companies, be sure to check out their credentials before signing up.

Choosing What Method/ Company to Use

Transfer Money

There are various considerations you should be mindful of if you plan on transferring money from abroad. The first and foremost is the issue of trust which we have already discussed above. Unless you absolutely cannot afford the associated charges, you should opt for a bank transfer or use a remittance company. You can probably send a very small amount of money through individuals if they are close family or friends. Otherwise, for larger sums, you should use official channels.

Bank Transfers Vs Remittance

After we’ve established the two frontrunners, it’s time to choose between them. Now this choice will depend on you. I have laid out some differences below to help you choose which method works best for you.

  1. Bank transfers typically take a longer time to transfer money compared to remittance channels.
  2. You will need a running bank account to receive money in case of a bank transfer. If you use remittance, you can pick up money directly from cashpoints.
  3. Remittance companies typically charge higher fees compared to bank transfers.
  4. Bank transfers are safer and more reliable in comparison to remittance companies.
  5. The exchange rate may differ between bank transfers and remittance channels.

Choosing the Right Firm

If you decide to send money through remittance channels, you have one more thing to consider: which firm you want to send money from. Since there are a lot of remittance companies, this can be a difficult choice.

A good starting point is a table above, where we have laid out the relevant fees for major remittance companies. You should also look into how accessible the company’s outlets are. Some companies may not have outlets in rural areas, while others may not support online transfers. Check up these things first and then decide on what works best for you. Look for credibility, accessibility, efficiency, and cost-effectiveness.

Final Thoughts

I have laid out all the necessary tools you will need to effectively choose the right channel for sending money. Remember to be vigilant and smart while choosing between methods to transfer money. It is also a good idea to stay informed on current exchange rates to avoid fraud. In the end, the decision is yours and you should decide on what is best for your particular needs.

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