Nepal Rastra Bank (NRB) has unveiled ‘NRB Foreign Direct Investment and Loan Management Bylaws, 2021’ on Jestha 25 [June 9, 2021]. The Bylaws aim at attracting the foreign investment and creating an enabling environment for the economic activities by managing and facilitating the approval or recording of the foreign currency, repatriation of the capital or dividend, approval of the foreign loan, inviting the loan in foreign currency, recording of such loan in foreign currency and approval for the exchange of the currency for the payment of the interest or loan to the foreign creditors, etc. According to the Bylaws, Nepal Rastra Bank has facilitated the inflow of foreign investment without the approval of the central bank. Now, it will not be mandatory for the foreign investor to obtain prior approval from the NRB to send or remit foreign currency to Nepal after obtaining foreign investment approval from the foreign investment sanctioning body. However, before bringing or transmitting foreign currency, written notice to the NRB should be made after the investment has been approved.
To understand the impact of the newly introduced Foreign Direct Investment and Loan Management Bylaw, 2021 by Nepal Rastra Bank