Core Viewpoint - The Reserve Bank of India (RBI) has announced a new policy allowing residents of Nepal, Bhutan, and Sri Lanka to directly obtain loans in Indian Rupees through Indian banks and their overseas branches, aiming to promote the internationalization of the Rupee and reduce dependence on the US dollar while facilitating cross-border trade settlements in South Asia [1] Group 1: Policy Implications - The policy is expected to provide easier access to financing for small and medium-sized enterprises (SMEs) in Nepal, especially during periods of domestic credit tightening [1] - However, economists warn that this could lead to an increase in imports from India, exacerbating Nepal's existing significant trade deficit [1] Group 2: Financial Sector Impact - The loan business of domestic banks in Nepal may be adversely affected, posing challenges to the country's financial independence and foreign exchange reserve management [1] - The Nepal Rastra Bank (NRB) is aware of the new policy and is currently assessing its potential impacts, with plans to develop corresponding regulatory measures in response [1]