IC exchange: Indian officials to visit NepalIndian authorities representing central bank and finance ministry are visiting Nepal soon to take stock of preparations made by Nepal Rastra Bank (NRB) to provide currency exchange facility to Nepalis holding demonetised Indian banknotes in denominations of 500 and 1,000.
Indian authorities representing central bank and finance ministry are visiting Nepal soon to take stock of preparations made by Nepal Rastra Bank (NRB) to provide currency exchange facility to Nepalis holding demonetised Indian banknotes in denominations of 500 and 1,000.
According to NRB Deputy Governor Chintamani Siwakoti, officials of Reserve Bank of India (RBI) will visit Nepal within four-five days and probably make an announcement about the exchange facility.
“During our visit to India last month, when we asked the Indian officials to provide the exchange facility to our citizens, they had said they would visit Nepal first and see things and make an announcement,” said Siwakoti at programme organised by Presidential Business School on the implications of India’s demonetisation on Nepal. “They couldn’t make the visit immediately as they were busy with budget preparation. Now, since India has already unveiled the budget, they can visit us any time.”
A Nepali delegation led by Siwakoti had visited India in January to discuss the issue of providing currency exchange facility to Nepalis holding IRs500 and IRs1,000 notes that were pulled out of circulation by the Indian government in November 2016. The team had visited India almost two weeks after the expiration of the December 30 deadline to deposit the banned notes in Indian banks.
But Indian authorities refused to take any decision then and chose to visit Nepal first. They have expressed fear about the possibility Nepal being used as a “clearing house” to channel illegally amassed banned notes into India’s financial system.
The Indian government’s move has caused inconvenience to many Nepalis, especially those who earn a living by working as daily-wage labourers in India, visit the neighbouring country seeking medical treatment or rely on Indian markets to purchase daily essentials.
NRB has said IRs33.6 million in denominations of 500 and 1,000 is within the financial system in Nepal. The figure includes cash parked at vaults of banks, financial institutions and NRB.
But actual stock of banned Indian bank notes is expected to be much higher because Nepalis were previously allowed to carry Indian 500- and 1,000-rupee bank notes worth up to IRs25,000. Also, those residing in areas bordering India usually stash Indian notes of larger denominations as they have to visit Indian markets frequently to buy goods.
Former NRB governor Yubaraj Kahtiwada criticised the central bank for not being proactive in solving the issue. “Our central bank, instead of taking stock of the demonetised Indian bank bills held by our citizens, banned the bills in Nepal too following the Indian decision,” said Khatiwada. “NRB should have first asked the Nepali citizens to declare the banned notes in their possession.”