Nepal's central bank has ordered banks and financial institutions to extend letter of credit (L/C) tenors due to difficulties importers have had with shipments blocked at the country's border with India.

Landlocked Nepal imports almost all of its supplies from abroad, mostly from India, but Terai protests and blockades have left many consignments stranded on the Nepal-India border.

Extension

Nepal Rastra Bank (NRB) has said that importers' L/Cs can now be extended from 120 days to 180 days.

This provision will apply to L/Cs issued prior to issuance of today's directive, a statement from the bank added.

New constitution

After decades of political unrest, Nepal put a new constitution into effect in September.

Although the constitution was passed by 85 per cent of the Nepalese assembly, politicians and the Terai people living in the Himalayan foothills have refused to recognise it and have blocked trade routes from India.

This has led to shortages of petroleum products, life-saving medicines, food products, raw materials and other essential items.

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