Kathmandu, October 6
Nepal Rastra Bank (NRB) has eased its foreign exchange policy by increasing the foreign currency exchange limits for medical treatment abroad, telecommunications services and the import of aircraft equipment and spare parts.
Issuing a new directive, the central bank has doubled the annual foreign exchange facility available to Nepali citizens travelling abroad for medical treatment.
Nepali citizens can now exchange up to US$30,000 per year for treatment at hospitals abroad and for purchasing medicines and medical equipment. The previous limit was US$15,000.
The central bank has also increased the limit for advance payments by Nepali airlines importing aircraft engines, spare parts and other equipment. Banks and financial institutions can now make advance payments of up to US$500,000 based on the required documents, including a recommendation from the concerned regulatory authority.
Previously, the limit for such advance payments was US$100,000. A bank guarantee from a foreign bank will no longer be required for the facility.
Similarly, Nepali telecommunications service providers can make payments of up to US$500,000 annually through banks and financial institutions for leasing or using satellite services from foreign service providers under an agreement.
The central bank has also introduced new requirements for imports from China. Importers seeking foreign exchange facilities must provide a commitment that the goods have not already been imported. They must also make a payment of at least 10% of the import value before shipment.
The full payment must be made before the goods are cleared through customs, according to the new provision.
For imports through drafts or telegraphic transfers, banks must submit monthly details of partial payments made before shipment within 15 days of the end of each month.
The NRB has also increased the foreign exchange facility for payments for services imported from countries other than India. Commercial banks can now provide up to US$30,000 or an equivalent convertible currency per transaction, based on approval, agreement or a foreign exchange recommendation from the concerned regulatory authority. The previous limit was US$15,000.
For services imported from India, the limit has been increased to INR 6 million per transaction, from INR 4 million previously. A recommendation from the concerned authority will be required for the facility.
The central bank has also introduced provisions concerning payments between travel and tour agencies. If an agency purchases services from another travel or tour agency and provides them to customers, the agency selling the service must issue a foreign currency invoice. The purchasing agency must receive the foreign currency in its bank account and make payment without exceeding the amount received for the particular purpose.
The NRB has further allowed Class A banks to issue foreign currency bank guarantees for Nepali firms and companies seeking to bring foreign loans into Nepal from foreign institutions.
The provision applies to companies involved in information technology, commercial agriculture, manufacturing, infrastructure development, tourism and energy-related industries. Previously, energy-related industries were not included under the provision.
The central bank has also introduced provisions for foreign currency earned through exports of services using electronic cards. Such foreign currency must be credited to the card, and at the request of the cardholder, the amount can be transferred to their domestic or foreign currency bank account.
If the balance on a card exceeds US$10,000 or its equivalent in convertible foreign currency, the excess amount must be deposited into the cardholder’s domestic or foreign currency account.
