NRB: Submit status of foreign funding

- POST REPORT, Kathmandu
NRB: Submit status of foreign funding

Mar 1, 2015-

Nepal Rastra Bank (NRB) on Sunday asked industries and firms that have got approval for or received foreign investment/loans to submit the latest status of the funding to the central bank.

A case of suspicious transfer of “foreign loans” to firms owned by businessman Ajay Raj Sumargi prompted the Nepal Rastra Bank (NRB) to issue the second notice. NRB had first issued the notice on February 21, 2013.

The central bank warned it would not be obligated to provide foreign exchange facility to firms that fail to regularly update the status of their foreign investment and loans.

“Only around 150 industries and companies having foreign investment and loans have so far updated the status of the funding since we issued the first notice,” said a senior NRB official. “It is a very low figure given over 1,000 industries were registered at the Department of Industries over the period.”

The central bank has told the firms to submit details of approved foreign investment and loans and the amount that has arrived twice a year  -- in July-August and January-February.

According to the NRB notice, once updated, the same details should not be submitted again. But if investment is added, or remaining part of the approved investment/loan arrives, or the ratio of foreign investment is changed, those updates should be submitted to the NRB.

NRB had barred the release of around Rs 3.1 billion that has come in the name of Sumargi’s name, stating the companies have not been registered in Nepal. Sumargi could, however, secure the release of Rs 6 billion that came in the form of remittance, according to a senior NRB official.

During a Parliamentary Finance Committee meeting on February 15, NRB Governor Yuba Raj Khatiwada had said there is a trend of bringing back own money as loan, raising the risk of returning back the money without paying taxes here.

In a directive issued on May 6, 2013, and September 11, 2013, on loans from foreign countries for industries and firms, the central bank had stated the firms concerned should submit documents such as why the loans could not be taken from domestic banks at desired interest rate.

The interest should be not more than one-year libor rate plus up to 5.5 percent. Likewise, the concerned companies here should apply with the central bank with a detailed time table for when the loans will be received and when they will be repaid.

 

Published: 02-03-2015 08:44

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