Nepal Rastra Bank (NRB) has tightened the import of luxury items including vehicles as well as valuable goods like gold and silver.
On Monday, NRB issued instructions to banks and financial institutions to discourage imports. The directive seeks to discourage the import of sugar/chocolate, cloves, mineral water, liquor/vinegar, cigarettes/tobacco products, cosmetics, wooden goods, shoes, slippers, umbrellas and sticks, marble, cement, plaster and ceramics, and gold and silver.
As per the instructions, in order to import these valuable goods, the importer has to deposit a 100% margin amount in the bank at the time of opening the letter of credit.
Similarly, it has been directed to keep a 50 percent cash margin for the import of non-electric vehicles and motorcycles. There is a provision in the NRB directive that the banks will not be allowed to give loans for the said margin amount and will not be allowed to pay interest on the amount deposited as margin.
NRB has tightened imports as a high trade deficit and declining remittances have put pressure on foreign exchange reserves. Earlier, the NRB had set a limit on tightening silver imports.
