Himalayan News Service

Kathmandu, February 5

Nepal Rastra Bank (NRB) has issued directives at the beginning of this week to commercial banks of the country to make an advance payment to importers while importing goods through the letter of credit (LoC).

Informing about the directive issued with a view to help importers, Krishna Bahadur Manandhar, executive director of the central bank at the foreign exchange department said, "It is an initiative of NRB to ease out difficulties being faced by importers through LoC for a long time now."

For six years, there was no provision for 10 per cent advance payment while importing goods. This had given birth to scandals related to LoC from time to time while importing goods.

"This is a new provision in the case of importers who can use commercial banks to facilitate import-trade without sacrificing regulatory control," Manandhar commented. "This will boost the import trade and morale of genuine importers," hoped Manandhar. Producers have been demanding at least 10 per cent of the imported amount in advance to secure business deals, according to importers. Pradeep K Shrestha, former president of Federation of the Nepalese Chambers of Commerce and Industry (FNCCI) said that 10 per cent advance payment provision to producers would, to some extent, ease the problems being faced by importers for long.

Shrestha informed that there was a tendency of asking for bank guarantee by producers but from now on, such problems related to bank guarantee will not exist. Similarly, no permission is needed from central bank to import goods if transactions are done using dollars, he said. "This provision will further build up the confidence between importers and exporters", hoped Shrestha.

If an industry is going to demand a machine from a foreign country, any individual or company has to deposit 10 per cent of the total value of things being imported at the bank as an advance payment which will help in timely delivery of goods without unnecessary hindrances.