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Nepal Rastra Bank has amended the “Foreign Investment and Foreign Loan Management By-laws” (hereinafter “By-laws”) on 23 January 2022 (9 Magh 2078) pursuant to the rights granted by Foreign Exchange Regulation Act 1962 and Nepal Rastra Bank Act 2002. This By-law has introduced a new benchmark for foreign loan management. The old provisions regarding LIBOR for foreign loans has been amended and a new benchmark “one year benchmark interest” has been set out for foreign loans. Nepal Rastra Bank has set benchmark rate of foreign loan in US dollars in Secured Financing Overnight Rate (SOFR), foreign loan in Pound in Sterling Overnight Interbank Average Rate (SONIA), foreign loan in Swiss in Swiss Average Rate Overnight (SARON) and foreign loan in Japanese Yen in Tokyo Overnight Average Rate (TONA).

To download the revised Foreign Investment and Foreign Loan Management By-laws: click here

Disclaimer: This note shall not be treated as a legal opinion and it is advised to consult a lawyer for legal advice. This note is for general understanding only. Please note that the copyright for this note vests on Vidhi Legal Concern