Bankers’ Association decides not to issue LC for luxurious goods

Kathmandu: Commercial banks have decided not to open letter of credit (LC) for import of various goods as the country’s foreign exchange reserves are declining.
A meeting of the Nepal Bankers’ Association (NBA) held on Sunday has decided not to open LC for import of vehicles, dry food, furniture, cigarettes, liquor, decorative items, perfumes, mobiles and other items.

The meeting of the Chief Executive Officers (CEOs) of the commercial banks today formally decided not to issue LC as the NRB has given verbal instructions not to open the LC for non-essential items.

LCs will not be opened for import of luxury goods for at least a week and further decision will be taken at the next meeting.

NRB has already made an arrangement to keep fifty to one hundred percent cash reserves when opening LCs for importing about one thousand three hundred types of goods to prevent the declining dollar reserves.

Today’s decision by the Bankers’ Association is expected to reduce imports of luxury goods and provide some relief to the dollar reserves.