Nepal | June 17, 2019

Exchange facility for demonetised INR sought

Pushpa Raj Acharya

Kathmandu, December 21

A panel led by deputy governor of Nepal Rastra Bank is planning to meet the leadership at the Indian Ministry of Finance to seek exchange facility of the demonetised high value Indian banknotes that were in circulation in the country before being banned by the Indian government.

The panel has written to India’s Ministry of Finance through the Nepali Embassy in New Delhi seeking a convenient date for the meeting, as the December 30 deadline announced by the Indian government to deposit banned INR 500 and INR 1,000 notes is fast approaching.

However, the deadline was announced for Indian nationals, and the government of India has not yet communicated with Nepali officials on how the now-banned currency possessed by Nepalis could be exchanged.

“We are trying to meet the top leadership and officials of the Finance Ministry of India to seek a way out to surrender the currency held by NRB, banks and financial institutions, money changers, hotels and the general public,” Deputy Governor of NRB Chinta Mani Shiwakoti told The Himalayan Times, adding that the Indian side is yet to respond.

Even BFIs in Nepal have substantial amount of INR 500 and INR 1,000 notes because the Indian currency is widely accepted in the country and the Indian government also allows both Indian and Nepali nationals to carry up to
INR 25,000 in cash.

Earlier, when NRB had written to the Reserve Bank of India and Ministry of Finance of India, seeking exchange facility, RBI had informed that it would take a decision regarding the exchange facility for Nepal and Bhutan after the Indian government had administered clear instructions.

It is reported that India’s Ministry of Finance had also formed an inter-ministry committee comprising officials from the Ministry of Finance, Ministry of External Affairs and officials from the RBI to study the modality to provide exchange facility for Nepal and that the committee has already submitted its report. However, the Indian government is still mum on the exchange facility.

NRB Deputy Governor Shiwakoti also mentioned that the central bank had developed a mechanism in the country to plug all possible loopholes to stop the inflow of illegal Indian currency to Nepal. “We want to assure the Indian government that only genuine people will be able to avail the exchange facility,” he added.

The deputy governor-led committee comprises Joint Secretary of Ministry of Finance Anada Raj Dhakal, Executive Director of Foreign Exchange Management Department of NRB Bhisma Raj Dhungana and Minister (Economic) at the Embassy of Nepal in New Delhi Krishna Hari Pushkar.


A version of this article appears in print on December 22, 2016 of The Himalayan Times.


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