Central Trade Finance Division

LC is an undertaking/guaranteeing from issuing bank on behalf of customer to pay to the beneficiary's bank upon receipt of compliant documents as per terms and conditions mentioned in LC. 

• LC can be issued by taking LC limit duly signed be concerned credit department or at 100% cash margin.
• Our dedicated team from Credit Department shall guide you to establish Letter of Credit Limit Facilities. 

• No. Only one mode of mechanism either LC or full payment through swift (TT) can be used.
• However, if you wish to send advance payment. LC can be issued where we can put the clause of sending advance payment. 

No. Goods allowed by NRB- Foreign Unified Circular can only be imported.

Yes. Some goods are fully restricted. Some have quantitative restrictions and some requires pre-approval. These are prescribed by NRB- Foreign Unified Circular and Import-Export Act 2013 BS. Our Trade Team shall guide you on this (if required).

No. Goods that mentioned in NRB- Foreign Unified Circular are only allowed to import in USD from India. 

Trading firms are not allowed to import second hand goods. However, manufacturing industries can import second hand goods for which manufacturing date should be within 5 years. 

No. INR payment is allowed only in India. 

Following Documents shall be required to issue a LC as prescribed by regulatory body (Nepal Rastra Bank from time to time):

• LC application duly signed by the applicant. (Our dedicated CTFD team shall guide you) 
• A signed and stamped Proforma Invoice/Sales Contract 
• All the related legal documents regarding firm registration.
• Tax clearance certificate/ Tax payment certificate 
• Bi. Bi. NI- 3 ( as prescribed by NRB)
• Approval from related government body for goods that require pre-approval to import (as prescribed by NRB).
• Insurance (in case of importer is responsible for insurance)

• Goods name, brand and model (if any)
• Country of Origin
• Per unit price, total quantity and total amount
• Incoterm such as: CIF, FOB, CFR, EXW etc
• Payment terms: Sight or Since (up to what time period) or Deferred Payment (how much in advance and how much after receiving full quantity)
• Harmonic code as prescribed by Nepal Customs 
• Importer/Exporter name, address and telephone number and Exim Code of Importer 

You can submit the LC application to any of our branch near to you. We also entertain scanned application via email. 

• We issue LCs in US Dollar, Japanese Yen, Euro and Sterling Pound. 
• We can issue LC in any country provided that the countries are not in the sanctioned list.  

We issue LC at instant (within a day) provided that required documents are compliant and fulfilled. 

You can amend the LC provided that all the parties- importer, issuing bank, exporter and exporter's bank agrees to it.

Once the letter of credit is issued your fee cannot be refunded. We recommend to all of our clients that they need to assure themselves of their suppliers' ability to perform before opening any banking instruments to them.

You can cancel LC with cancellations charges only if we receive consent from all parties involved in LC.

• Our bank shall transmit the LC through an electronic mechanism called SWIFT to the bank as mentioned by exporter in PI/SALES CONTRACT directly or by an intermediary bank.  
• Upon receipt of LC by your beneficiary from beneficiary's bank. The exporter can now get assurance and dispatch the goods as per the agreement between importer and exporter. 

• Payment depends upon the terms of payment mentioned in LC. SIGHT OR USANCE/Deferred. 
• Sight payment means payment is done within 5 working days upon receipt of complying/correct documents received from beneficiary's bank.
• Usance payment means payment is done at prescribed time for e.g 30 days from the date of commercial invoice, 90 days from date of transport document)
• One must keep in mind that LC deals with documents only and bank does not confirm the physical content/quality/quantity of the goods.
• Thus, new applicants are suggested to issue usance LC where payments are done after certain days as prescribed in LC payment terms.

Yes. Trust Receipt Loan facilities can be availed for LC Payment. Our Credit Department will assist on this. NPR TR facility can be availed maximum for 120 days and Foreign Currency TR Loan can be availed maximum for 180 days (forex TR is available only for sight LC and only for industries). The duration may change as prescribed by NRB from time to time. 

• No. However, if documents received from beneficiary's bank is not as per LC terms (termed as 'discrepant documents') upon examination by issuing bank, importer can hold payment until the beneficiary sends the corrected documents.  (Refer UCP 600 Article 15 and 16.)
• However, for the release of the goods from custom office, applicants must accept the discrepant documents and make payment as per LC terms.

• Payment must be done on due date. If importer is unable to arrange funds required for payment of LC Bank does the payment booking the force loan in the client's name that has a highest rate of interest. 
• Client shall be unable to do other transactions when Force Loan is booked and is encouraged to settle it immediately.

• Upon receipt of LC by the exporter, Exporter prepares the required documents as mentioned in the LC and forward them to us via exporter's bank. 
• We shall verify the document with LC and prepare BI.BI.NI. 4 (as prescribed by NRB) upon receipt of 'Acceptance of Documents' Letter and invoice value payment from you in case of sight LC.  
• In case of usance LC, only 'Acceptance of Documents' letter is required from you and invoice value payment is done on due date. 
• You can then release the goods based on LC documents signed by us along with Bi.Bi. Ni 4.

• Yes. You can. But only in case of imports from India. We shall verify the copy document with LC and prepare BI.BI.NI. 4 (as prescribed by NRB) upon receipt of 'Acceptance of Documents' Letter and invoice value payment from you in case of sight LC.  
• In case of usance LC only 'Acceptance of Documents' letter is required from you and invoice value payment is done on due date. 
• You can then release the goods based on LC documents signed by us along with Bi.Bi. Ni 4.  However, original documents must be received by us within 45 days.

No. Letter of Credit (LC) deal with documents and not with goods, services and/or other performances. (Refer UCPDC Article No 5.)

Yes. The banks deal with documents not goods and will not physically confirm the content of shipment.

Importer must mandatorily submit the Pragyapanpatra/ Bi.Bi. Ni 4  and Tax receipt as soon as goods are released from custom office.

• As per LC rule, Bank deals with documents only and makes payment as per LC terms upon receipt of complying/correct documents. 
• Our bank can assist you in communicating with the exporter's bank but cannot guarantee the refund. 
• However, an importer may file a case to the court for such fraud and act accordingly.

• Generally charges inside the issuing bank countries are borne by the importer and outside the issuing bank country are borne by exporter.
• The charges to be borne are mentioned in LC itself.
• However, if the charges to be paid by exporter are not received to the beneficiary's bank. Importer is bound to pay those charges as per LC law. (Refer UCPDC 600 Article 37)