Now, to open a Letter of Credit (LC) in banks, the importer has to keep a margin of 100 percent. Nepal Rastra Bank (NRB) issued instructions to implement the provisions mentioned in the monetary policy review. According to the nature of the goods, NRB has made an arrangement to keep the margin up to 100 percent in the total price of imported goods.


Mandatory margins have been provided for opening LCs in line with the policy of tightening imports as foreign exchange reserves are declining. This has led to importers having to raise money in advance to import goods. Banks will not be allowed to pay interest on such margin amounts.

Similarly, no bank will be allowed to disburse loan (in domestic currency) for the purpose of depositing margin amounts. No advance payment will be made for the import of the said item. Banks will have to collect the margin amount from the importer at the time of opening the LC.

When paying the import amount, such margin will be paid from the amount. NRB has stated that the provision of margin will not apply to the imports made by government bodies, diplomatic missions, and hospitals.


Until now, banks have been deciding for themselves whether to keep margin when opening an LC. Some of them used to open LCs without taking any margin on the basis of trust. NRB has clarified that the margin system will not be applicable in the case of raw materials imported by the industries for their own purposes. Similarly, there will be no provision of mandatory margin for imports for medicinal purposes. But in this regard, the bank will have to take the self-declaration from the importer.

Electric vehicles have been encouraged for the import of vehicles. Now, 50 percent margin has to be maintained while importing motorcycles and scooters. The NRB has stated that this provision will not be applicable in case of motorcycles and scooters driven by persons with electric and physical disabilities. Similarly, importers of private vehicles running on petroleum products have to maintain 50 percent margin. However, this does not apply to electric vehicles.


The import of beer, wine and other alcoholic beverages, tobacco products, silver and other commodities has to be kept at 100 percent margin. Similarly, 100 percent margin should be kept on furniture related items.

Sugar and confectionery, glucose, mineral water, energy drinks, cocktail drinks, make-up products, shampoos, hair oils and collars, hats, shoes, umbrellas and other commodities should be subject to 100 percent margin. Similarly, 100 percent margin has been fixed on building materials like bricks, marble, tiles and ceramics.

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