Currency notes to reach Friday

KATHMANDU: From Friday, there will be enough high-denomination currency notes in the market.

“The consignment of currency notes will reach Nepal tomorrow. It has started from Kolkata port yesterday,” a high level source at Nepal Rastra Bank (NRB) said.

The belated consignment had reached Kolkata port on October 2. But due to holidays on successive days in India, it started from Kolkata only yesterday.

“The notes will be sent to Pokhara, Biratnagar, Nepalgunj and Kathmandu from Birgunj the day the consignment arrives,” the source added.

Due to late delivery of the notes by the printing company, there was a shortage of high denomination currency notes and the central bank faced hard times ahead of Dashain to meet the demand of banks.

After the bankers’ pressure, NRB had circulate old currency notes worth Rs 940 million that bore ex-governor Tilak Rawal’s signature and had ‘some technical glitches’, as a stop-gap measure. The central bank had also circulated some Indian currency (IC) to cope with crisis.

The government has formed a high-level committee headed by Dr Mangal Siddhi Manandhar to probe into the shortage, printing and supply of currency notes. The committee will prepare and submit the report within 21 days.

However, the demand for cash has also come down drastically since Dashain — the annual festival — ended officially a week ago. “Customers are coming with deposits and the demand has gone heavily down,” said a banker.

On October 1, 2008, NRB and Oberthur Technologies, Division fiduciaire — a French company — had entered into an agreement to deliver 40 million pieces of Rs 500 denomination notes — that is Rs 20 billion — by this August.

Oberthur Technologies, Division fiduciaire — the world’s third largest private security printer specialising in high security for the production of banknotes, checks and other fiduciary documents in more than 50 countries — deferred the date of shipment of the consignment twice by two months from August to September.

Had the company shipped Rs 20 billion on time, there would not have been any shortage. But the company could dispatch only 20 per cent (Rs 4.5 billion) and the rest of the consignment reaching Nepal is worth Rs 15.5 billion.

The reason for the shortage was also due to more than doubled demand for currency notes this Dashain in comparison to last Dashain. This Dashain, NRB pumped around Rs 18 billion into

the market but it was not enough. Last year, NRB had circulated Rs 12 billion and that had sufficed.