Nepal Rastra Bank raises payment limit for service imports

Kathmandu: Nepal Rastra Bank (NRB) has increased the payment limit for service imports, easing foreign exchange rules for transactions with third countries (excluding India).

Now, service imports worth up to US$ 8,000 per transaction can be paid for without requiring NRB approval, provided the prescribed documents are submitted.

Previously, the provision applied only to transactions up to US$ 5,000. However, if a service contract with a foreign provider or payment obligation exceeds US$ 8,000, approval or recommendation from the relevant regulatory body will be required. For example, insurance companies will need a recommendation from Nepal Insurance Authority, while internet service providers will require approval from the Nepal Telecommunications Authority.

The recommending regulatory body must verify the necessity and justification for the payment before endorsing it, according to existing rules. Until now, payments above US$ 5,000 required regulatory approval, while payments above US$ 12,000 required both regulatory endorsement and NRB approval. Under the revised provision, NRB approval will now be needed only for service import payments exceeding US$ 15,000 per transaction.

In cases where no regulatory body exists, or an agreement cannot be approved or recommended by the regulator, NRB’s approval will still be required for payments exceeding US$ 8,000 or the equivalent in other convertible foreign currencies.

The central bank has also raised the advance payment threshold, requiring a bank guarantee from a foreign bank only if the advance exceeds US$ 15,000, up from the earlier limit of US$ 12,000.

Revati Prasad Nepal, head of NRB’s Foreign Exchange Management Department, said the changes aim to facilitate service imports by reducing procedural hurdles.

Additionally, NRB has allowed payments of up to US$ 15,000 for importing services related to language and standardized tests conducted in Nepal by foreign institutions — such as IELTS, TOEFL, PTE, GRE, GMAT, and SAT — without needing NRB approval. Commercial banks can process such payments directly based on the required documents, and no recommendation from a regulatory body will be necessary.