KHATMANDU: It has long been an open secret that star hotels provided foreign exchange facility to the tourists. But very recently one four-star hotel faced action from the Nepal Rastra Bank (NRB) on charge of violating the foreign exchange regulation.
“While hotels can accept payment for providing service in foreign currency and return excess amount in local currency, they are not allowed to provide foreign exchange facility,” explained Bhisma Raj Dhungana, executive director of Foreign Exchange Management Department of NRB.
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Based on the information that a number of hotels were providing foreign exchange facility to tourists by setting up special counters within the vicinity, NRB had intensified its monitoring. Subsequently, a delegation of hoteliers had urged the NRB to extend the authority so that hotels could provide exchange facility up to a certain limit.
However, the central bank has turned down the request and said that the inspection will be further intensified and those violating the rules would have to face music if they did not stop the ‘illegal’ activities immediately.
The reason behind barring even star hotels from providing foreign exchange facility is that they have been known to set high margins and not provide the facility as per exchange rates fixed by the central bank. “This is why the foreign exchange rules have a provision that the hotels can only accept payment in foreign currency — which means that to obtain foreign currency from tourists they have to be able to present the bills against sales of goods or services,” Dhungana told The Himalayan Times.
The central bank intensified its monitoring also owing to the prolonged crunch of the greenback in the market and the NRB suspects that the shortage is also due to foreign exchange facilities being provided by hotel companies.
For their part, hoteliers argue that the foreign exchange provision is impractical and they have urged the central bank to review the rule to facilitate hotels, which ‘make significant contribution to earn foreign currency’.
“As per the central bank rules, hotels can accept foreign currency only against the sale of its services, but what do we do if a tourist arrives at a hotel at midnight and he has to pay for taxi, but he only has foreign currency?” a hotelier questioned on condition of anonymity.
