NRB Tightens Import Of Luxurious Items
Since surging imports have put pressure on foreign exchange reserves, the Nepal Rastra Bank (NRB) has limited imports of some expensive commodities to further discourage imports.
The central bank has created an arrangement to retain cash margin while opening LC (letter of credit) in banks for importing such commodities, according to a circular issued on Monday.
The NRB has made it possible to keep 100% of the amount when importing goods with 19 different harmonic codes, whereas only 50% of the amount can be kept when importing commodities with one harmonic code.
For the imports of sugar and chocolate, mineral water, liquor, and vinegar, cigarettes and tobacco products, perfumes, cosmetics, wooden goods and accessories, shoes, sandals, umbrellas, and sticks, cement, plaster, and ceramics, and other valuable items, including gold and silver, the NRB has set a 100% cash margin while opening LC.
Similarly, a provision has been provided to retain a 50% cash buffer when creating an LC for non-electric vehicles.
This does not apply, however, to raw materials imported by businesses for their own use. This restriction will not apply if the import is for therapeutic purposes, according to the NRB. Margin money can be deposited in a variety of ways, including cash, current, savings, and call deposit accounts, or by using a payment method. However, there can be no interest charged on the margin amount.
The NRB has said that no loan (even in domestic currency) can be disbursed for the purpose of depositing margin money.
The above-mentioned items will not be eligible for advance payment, according to the NRB.
The margin amount should be taken when the letter of credit is opened. This amount of margin can also be used to pay for imports. According to the NRB, this arrangement would not apply to imports made by Nepalese government agencies, diplomatic missions, or hospitals.