Kathmandu. Nepal Rastra Bank (NRB) has become flexible in foreign investment. The central bank has adopted a flexible policy by making the fifth amendment to the Foreign Investment and Foreign Debt Management Bylaw-2078 BS.
Earlier, the bylaws had defined ‘foreign investment through change of share ownership’. According to the Act, foreign investment in a newly established industry and the existing Nepali industry does not change the ratio of the shareholders and their shares in the existing Nepali industry. This provision has been removed under the amended bylaws.
Similarly, the banks and financial institutions could deposit the amount in the account of the interested foreign investor or his/her authorized local representative. As per the provision, the banks and financial institutions are required to apply to the central bank from the foreign investor interested in depositing the amount and his/her authorized local representative. This management has also been removed through the amended bylaws.
According to the NRB’s earlier bylaws, the foreign investment and technology transfer (first amendment) Regulations, 2079 BS have the provision that if the foreign investment cannot be brought in within the stipulated time, the foreign investment approving body should also submit the approval of the extended period. The central bank has also removed this provision through amendment.
Similarly, the NRB has also been flexible in the facility of withdrawing foreign investment and earned money. Earlier, approval from the Rastra Bank was required to avail such facility, but now only commercial banks can provide this facility. This means that the NRB’s approval will not be required to repatriate the money earned from foreign investment.
Earlier, the Rastra Bank (NRB) had made it mandatory for a foreign investor or company or industry with foreign investment to submit an application to the Foreign Exchange Unit of the Nepal Rastra Bank (NRB) for exchange approval of foreign currency. In the amended bylaws, the responsibility of providing this facility has been assigned to the commercial banks.
