NRB’s directive to import non-essential goods with a 100% cash margin has brought some improvement in liquidity. Lately, deposits of commercial banks have improved.
Deposits of 27 commercial banks have reached Rs 43.12 trillion. Compared to mid-January, the deposits of commercial banks have increased by Rs 1.37 billion in the last one week.
According to the data released by the Nepal Bankers’ Association on Monday, the deposits reached Rs 43.12 billion out of Rs 4.31 trillion as of mid-January.
NRB’s directive has made arrangements for cash margin on import of goods under 47 HS code to control the increasing import.
The NRB had issued a circular stating that there was a problem in liquidity as well. It is mentioned in the circular issued by NRB that some items should have 100 percent margin and some should have partial margin.
Nepal Rastra Bank (NRB) had issued instructions to the commercial banks on January 10 to tighten the import of foreign goods. Earlier, it was increased to 47 after the information was issued to keep cash margin on items coming under 18 types of codes.
Deposits had declined by Rs 13.5 billion in January. According to the Bankers’ Association, however, there has been an improvement.
According to the association, credit flow has also increased due to such increase in deposits. Out of the total loan disbursement of Rs. 41.54 trillion till mid-January, the credit flow has increased by Rs.
What is cash margin?
When purchasing any item, the trader opens and imports the letter of credit through the bank. The process of importing the same by depositing the banks is moving forward.
The merchant pays the amount through the bank only when the goods arrive. Cash margin means that the trader has to deposit the same amount in the bank before importing any goods. In which the NRB has prescribed 100% and partial deposit according to the item.
