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Remittance is more than just sending money, it is a lifeline for families and a backbone of Nepal’s economy. Yet many people still confuse remittance with bank transfers, informal channels, or general money sending.

This guide explains what remittance really is, how it works, the legal ways to send it to Nepal, and what Nepali workers should know going into 2026.

What Does “Remittance” Mean?

Remittance refers to money that a person working abroad sends back to their home country, usually to support family members, savings, or investments.

In Nepal’s context, remittance typically means:

• Money sent by Nepali migrant workers

• From foreign countries

• Through licensed and regulated channels

• To individuals or households in Nepal

Unlike casual money transfers, remittance is formally recorded, regulated, and protected under national and international financial laws.

How Remittance Works (Step by Step)

A standard remittance process usually follows these steps:

1. The sender visits a licensed remittance service or partner abroad

2. Required identification and KYC details are verified

3. The amount is sent through a secure financial network

4. The receiver collects money in Nepal via:

   • Cash pickup

   • Bank account

   • Digital wallet

Licensed remittance providers ensure compliance with AML (Anti-Money Laundering) rules and central bank regulations.

Types of Remittance to Nepal

Nepalis can receive remittance in several ways depending on location, access, and preference.

1. Cash Pickup Remittance

Receivers collect money from authorized agents across Nepal.
This method is widely used in rural and semi-urban areas.

👉 Related page:
Pick up your money from an agent

2. Bank Deposit Remittance

Funds are credited directly into a Nepali bank account.
This is ideal for savings, tuition fees, and larger amounts.

👉 Related page:
Receive money in your bank account

3. Digital Wallet Remittance

Money is received in approved mobile or digital wallets linked in Nepal.

👉 Related page:
Receive money in City Pay

Formal vs Informal Remittance (Hundi Explained)

Formal Remittance

• Sent through licensed companies

• Regulated by Nepal Rastra Bank

• Protected, traceable, and legal

Informal Remittance (Hundi)

• Unlicensed and illegal

• No consumer protection

• High risk of fraud and loss

While informal channels may seem faster, they expose both senders and receivers to financial and legal risks. Nepal strongly encourages formal remittance to protect families and the national economy.

Why Remittance Matters for Nepal

Remittance plays a critical role in Nepal’s development:

• Supports household income

• Funds education, healthcare, and housing

• Strengthens foreign currency reserves

• Contributes significantly to national GDP

For many families, remittance is the primary source of monthly income, especially outside major cities.

Costs Involved in Remittance

When sending remittance, costs may include:

• Service charge

• Exchange rate margin

• Receiving method charges (if applicable)

Understanding these costs helps senders choose the most cost-effective and transparent option.

👉 Useful links to understand Remittance Service Charges:

• Service Charges Applied on Different Countries when remitting money to Nepal

• Latest Forex / Exchange Rates

Remittance Rules, KYC & Compliance

To ensure safety and transparency, remittance services follow:

• KYC (Know Your Customer) requirements

• AML compliance

• Transaction limits and monitoring

This protects users and prevents misuse of financial systems.

👉 Related policy:
AML Policy

How to Choose a Safe Remittance Service

Before sending money, Nepali workers should check:

• Is the service licensed and regulated?

• Are exchange rates transparent?

• Are fees clearly disclosed?

• Is customer support available in Nepal?

Using established providers ensures your hard-earned money reaches home safely and on time.

Frequently Asked Questions About Remittance

Is remittance the same as a bank transfer?
No. Remittance services are designed for individuals and families, while bank transfers are often slower and more expensive.

Can remittance be received anywhere in Nepal?
Yes, through nationwide payout locations and banking networks.

👉 Explore payout locations across Nepal to receive the Remittance Money:

Remittance is not just a transaction, it is a trusted financial bridge between Nepalis abroad and their families at home. Understanding how remittance works, the legal channels available, and the costs involved helps migrant workers make smarter, safer decisions in 2026 and beyond.