NRN can invest in capital market
KATHMANDU:
Nepal Rastra Bank (NRB) has finally paved the way for the foreigners to start retail investing in Nepal.
The foreigners investing in Nepal can deposit the dividends in a fixed deposit account and the interest thus earned from the deposit and the principle sum will be repatriated by Foreign Exchange Management Department of the central bank, according to the new directive issued by the central bank in a circular today.
However, the foreigners have to deposit the dividend’s sum for minimum of one year and that fixed deposit will not be eligible as collateral to get loans. The foreigners have to take prior permission from Foreign Exchange Management Department to open the accounts and keep it posted about the principle and interest incurred half yearly. The provision is expected especially to facilitate the Non Resident Nepalis (NRNs) interested in investing in Nepali capital market, according to the Monetary Policy for the current fiscal year. Though government had opened capital market investment for NRNs in last fiscal year’s budget, due to lack of exit policy, it remained in the paper only. Now, the NRNs can invest in the capital market through portfolio managers and deposit the return as fixed deposits.
The centyral bank has also fixed the single borrower limit to 25 per cent of primary capital including both fund based and non-fund based credit facilities with the exception of loans floated to hydropower projects, construction of transmission line and cable cars.
In the three sectors, the banks can issue loans up to 50 per cent of the capital.
Earlier, the central bank allowed the banks to float fund based loans up to 25 per cent of the primary capital and non-fund based loans up to 50 per cent of the capital. However, the central bank had asked the banks to bring down the loans granted to single borrower — be it individual or a firm to 25 per cent including both fund based and non-fund based credit starting from mid-January 2011. The fund based credit refers to banks actually grant cash to the borrower against securities. The banks do not give actual bank funds in non-fund based credits.
Negative declaration comes into effect
From now onwards, the depositors do not have to disclose the source of income while making deposits exceeding Rs 1 million as per Anti Money Laundering directives. The negative declaration that the deposit is not earned by illegal activities will equally be acceptable. Though, both Monetary Policy and Fiscal Policy had stated the negative declaration as acceptable, the banks and financial institutions could not implement the negative declaration unless the regulator — Nepal Rastra Bank officially directs them to through circular.
Source: THT
Nepal Rastra Bank (NRB) has finally paved the way for the foreigners to start retail investing in Nepal.
The foreigners investing in Nepal can deposit the dividends in a fixed deposit account and the interest thus earned from the deposit and the principle sum will be repatriated by Foreign Exchange Management Department of the central bank, according to the new directive issued by the central bank in a circular today.
However, the foreigners have to deposit the dividend’s sum for minimum of one year and that fixed deposit will not be eligible as collateral to get loans. The foreigners have to take prior permission from Foreign Exchange Management Department to open the accounts and keep it posted about the principle and interest incurred half yearly. The provision is expected especially to facilitate the Non Resident Nepalis (NRNs) interested in investing in Nepali capital market, according to the Monetary Policy for the current fiscal year. Though government had opened capital market investment for NRNs in last fiscal year’s budget, due to lack of exit policy, it remained in the paper only. Now, the NRNs can invest in the capital market through portfolio managers and deposit the return as fixed deposits.
The centyral bank has also fixed the single borrower limit to 25 per cent of primary capital including both fund based and non-fund based credit facilities with the exception of loans floated to hydropower projects, construction of transmission line and cable cars.
In the three sectors, the banks can issue loans up to 50 per cent of the capital.
Earlier, the central bank allowed the banks to float fund based loans up to 25 per cent of the primary capital and non-fund based loans up to 50 per cent of the capital. However, the central bank had asked the banks to bring down the loans granted to single borrower — be it individual or a firm to 25 per cent including both fund based and non-fund based credit starting from mid-January 2011. The fund based credit refers to banks actually grant cash to the borrower against securities. The banks do not give actual bank funds in non-fund based credits.
Negative declaration comes into effect
From now onwards, the depositors do not have to disclose the source of income while making deposits exceeding Rs 1 million as per Anti Money Laundering directives. The negative declaration that the deposit is not earned by illegal activities will equally be acceptable. Though, both Monetary Policy and Fiscal Policy had stated the negative declaration as acceptable, the banks and financial institutions could not implement the negative declaration unless the regulator — Nepal Rastra Bank officially directs them to through circular.
Source: THT
