Central Bank Allows NRNs to Open Savings Accounts in Foreign Currency

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Central Bank Allows NRNs to Open Savings Accounts in Foreign Currency

November 30: Nepal Rastra Bank (NRB) has amended the unified directive allowing non-resident Nepalis (NRNs) to open savings accounts in foreign currency. Along with the NRNs, even the companies promoted by NRNs are permitted to open bank accounts here in the country.

Nepal Rastra Bank made such provision by amending the directive after reviewing the monetary policy for the first quarter of the current fiscal year.

Earlier, NRNs were allowed to open only fixed deposit accounts in the country. From now on, they are allowed to open savings accounts as well, said Dev Kumar Dhakal, spokesperson of NRB. The new provision is introduced in view of the current liquidity crunch and declining foreign exchange reserves. When opening such an account, a minimum deposit of USD 5,000 is required and such deposits have to come through the banking system from abroad. Also, the principal and interest have to be paid through the banking system.

Likewise, the process has been easier to open deposit accounts for NRNs. They will now be able to open deposits for a minimum of USD 5,000. And the minimum term of fixed deposit has been fixed for one year.

Earlier, a minimum deposit of US dollar 10,000 was required for fixed deposit and the minimum term was two years. Dhakal said that such provision has been made with the aim of increasing foreign exchange deposits. This type of account can be opened in US Dollar, Euro, Pound Sterling, Australian Dollar, Canadian Dollar, Japanese Yen and Chinese Yuan.

New limit on silver import

NRB has also introduced strict provisions on the import of silver. To import silver, foreign exchange facility of USD 35,000 will only be provided at a time. Earlier, no such limit was set on imports of silver. The new rule has been introduced to discourage the unnecessary import of silver and minimize negative impact on the foreign exchange reserves.

NRB has also revised the limit of Document Against Payment (DAP) and Document Against Acceptance (DAA) to USD 50,000 from USD 100,000. From now on, only goods up to USD 50,000 can be imported at a time.

If companies related to commercial agriculture, manufacturing industries, infrastructure construction and tourism try to take loans from abroad, banks can issue guarantee. Banks have also been discouraged to deal in derivatives. NRB has now directed the banks to trade in derivatives not exceeding fifteen percent of the initial capital. Earlier, the limit was set at thirty percent. Dhakal said that the limit has been reduced in view of declining foreign exchange reserves. 

 

 

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