NRB raises primary capital limit to 25pc, Plans classification of remittance companies

KATHMANDU: Nepal Rastra Bank (NRB) has raised the limit of primary capital maintained for non-deliverable forward (NDF) transactions from 20% to 25%, as announced by Governor Dr. Bishwanath Paudel while unveiling the monetary policy for fiscal year 2082/83 (2025/26) on Friday.

The central bank also revealed plans to classify remittance companies based on their capital base and transaction volume, acknowledging their growing role in Nepal’s economy.

Boosting Foreign Investment and Forex Risk Management

To enhance Nepal’s attractiveness to foreign investors, NRB will enable foreign exchange risk management via commercial banks, allowing investors to hedge against currency volatility. Furthermore, the Foreign Investment and Foreign Loan Management Regulations, 2078, will be amended to ease procedures and ensure smoother repatriation of capital, interest, and dividends by foreign investors, foreign-invested industries, and branch or liaison offices of multinational companies in Nepal.

In addition, NRB will review the self-declaration cash foreign exchange limit for travelers and streamline requirements for Nepali individuals or entities holding foreign exchange abroad to report such holdings.

Gold Import and Distribution Policy Under Review

In coordination with the Government of Nepal, NRB will also reassess the existing gold import and distribution mechanism, based on recommendations from the study report on the gold trade. The aim is to bring more transparency and control to Nepal’s growing gold market.

Travel Forex Limit Increased to USD 3,000

As part of broader liberalization measures, NRB will increase the foreign exchange facility for Nepali citizens traveling to countries other than India from USD 2,500 to USD 3,000 per trip, reflecting rising global travel expenses and improving forex flexibility for outbound travelers.

Convertibility Expansion and Interbank Forex Policy Reform

Recognizing increased transactions in foreign currencies such as the Bangladeshi Taka and Sri Lankan Rupee, NRB plans to add these currencies to the list of convertible foreign currencies, allowing for better integration into Nepal’s foreign exchange system.

In addition, NRB will review the remittance exchange rate (Fedan Rate) and introduce policy measures for interbank transactions in convertible currencies to align with international forex practices.

Key Highlights from Monetary Policy 2082/83:

Primary capital requirement for NDF raised to 25%.

Remittance companies to be classified by capital and business volume.

NRB to revise gold trade policy in coordination with the government.

Forex limit for international travelers increased to USD 3,000.

Foreign investment regulations to be amended for easier capital repatriation.

More foreign currencies to be included in the convertible currency list.

Remittance exchange rate mechanism (Fedan) to be reviewed.

These measures reflect NRB’s strategic focus on strengthening Nepal’s external sector stability, enhancing investor confidence, and modernizing the financial system to support long-term growth.