As rising imports have reduced foreign exchange reserves, with a fall in remittances and a widening trade deficit, Nepal Rastra Bank (NRB) is set to increase the prices of four- and two-wheelers. Automobile importers now have to maintain a 50% cash margin when opening letters of credit (LC) in banks. Previously the margin was only 1%.
If not in cash, the margin amount can also be deposited by spending current, savings and call deposit accounts, but no interest can be paid on the amount. No loans can be disbursed even in domestic currency for purpose of depositing margin amounts and advanced payment will not be available for import. Electric vehicle imports, cars for government use, diplomatic missions and hospitals are exempt from this provision.