August 8: With the increase in foreign exchange reserves, Nepal Rastra Bank (NRB) has increased the maximum limit for opening letters of credit (LC) to ease imports. Prior to this, there was a provision which allowed opening an LC of up to USD 50,000 at a time. By amending this provision, the NRB has now allowed imports worth USD 60,000 or INR 30 million at a time.

In other words, goods worth USD 60,000 or equivalent in foreign currency can be imported into Nepal through a single transaction.

According to this arrangement, after obtaining the foreign exchange facility once, the importer must meet certain conditions for obtaining the same facility for the import of the next shipment of goods from the same exporter, the central bank has mentioned in the amended version of the Unified Circular-2079. In case of imports from India, such limit will be maintained at INR 30 million.

Although the limit of LC has been increased, some conditions still need to be fulfilled. According to the revised provisions, after importing goods the importers can avail similar facility only after seven days have passed since the previous shipment.

In order to get the same facility for the second time, the importer must submit a form certified by the customs office as proof of import of goods along with the customs declaration form and the receipt of the customs revenue clearance slip to the concerned bank and financial institution. Similarly, importers must also submit a self-declaration regarding the lapse of seven days in addition to these documents if they want to open LC in other banks.

The cash limit to be kept as security deposit for import of goods has also been reduced. As per the new provision, the security deposit on import by a manufacturer is maintained at only one percent of the value of imported goods while it is three percent for the traders. Previously, the rate was two percent and 10 percent for a manufacturer and a trader, respectively.