Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Government of India has officially introduced a new financial provision enabling Nepali citizens and institutions to access loans from Indian banks. The measure, published in India’s Official Gazette on October 6, 2025, comes under the Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations, 2025, issued by the Reserve Bank of India (RBI).
According to the notification, Authorised Dealer (AD) banks in India are now permitted to lend in Indian Rupees (INR) to persons residing outside India — specifically those residing in Nepal, Bhutan, or Sri Lanka, including banks in these countries — for the purpose of cross-border trade transactions.
The regulation, signed by Dr. Aditya Gaiha, Chief General Manager of RBI’s Foreign Exchange Department, marks a significant step in deepening regional financial cooperation among South Asian neighbors.
This amendment expands the scope of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, allowing Indian banks to directly extend financial services to Nepali residents or institutions engaged in legitimate trade activities involving India.
How Nepalis can access credit
Only Authorised Dealer (AD) Category-I banks in India — such as State Bank of India, Punjab National Bank, and ICICI Bank — are permitted to provide such loans.
Nepali traders, companies, or financial institutions involved in cross-border trade with India may apply for credit directly through these Indian banks.
The lending will be in Indian Rupees, and borrowers must demonstrate that the funds will be used strictly for trade-related purposes, such as import-export settlements or trade financing.
Experts say the move will make cross-border trade settlements smoother, reduce dependence on third-country financial channels, and strengthen economic and banking connectivity between India and Nepal.
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