April 11, 2022 | Investopaper
Commercial banks will not provide letter of credit (LC) for import of non-essential items.
Banks have decided not to open LCs to import luxury goods, citing declining foreign exchange reserves, huge deficit in balance of payments and lack of liquidity in the banking system.
The commercial banks have come to the conclusion that they will not open LCs for most of the commodities as per the wishes of the government and the Nepal Rastra Bank. Accordingly, LCs will not be opened for the import of mobile, liquor, cigarettes, private vehicles and other goods.
Earlier, NRB has made a provision to keep 100 percent margin on the import of betel nut, chilli, chhokada, cloves, sweetmeat, powdered milk, vehicles, cosmetics, furniture, textiles, readymade garments, silver, paints, juice, precious metals and stones. After that, other items were added to it and provision was made to keep margin on import of 47 items.