Govt told to sort out INR exchange issue
Kathmandu, November 17
The Finance Committee of the Legislature-Parliament on Thursday instructed the Ministry of Finance and Nepal Rastra Bank to sort out the issue of exchange facility of high denomination Indian banknotes as early as possible.
The parliamentary panel today sought progress to surrender high denomination Indian currency that is in Nepal after the Indian government decided to demonetise INR 500 and INR 1,000 notes last week.
In the meeting, Deputy Prime Minister and Minister for Finance Krishna Bahadur Mahara said the finance ministry was holding talks with its counterpart ministry in India seeking exchange facility for Nepal.
Mahara said the Indian finance ministry would soon take a decision on the matter.
He also urged people not to panic, as the ministry had requested the government of India to resolve the issue legally.
Mahara added that the government was seriously working on handling this issue and the prime minister had also talked to his counterpart to accelerate the process of surrendering high denomination Indian banknotes.
Though there are only INR 33.69 million worth of INR 500 and INR 1,000 bills in the financial system, as per Nepal Rastra Bank data that was submitted to Reserve Bank of India, the government has assumed that there is significant amount of high denomination Indian banknotes with traders (mostly based in India-Nepal border areas), hotels, migrant workers’ families and general public frequently travelling to India, as the Indian government used to allow high denomination Indian currency up to INR 25,000.
In the meeting of the parliamentary panel, NRB Governor Chiranjibi Nepal said the central bank had approached RBI immediately after the Indian government’s decision to demonetise INR 500 and INR 1,000.
“RBI has told us it would convey our message to Indian finance ministry as it cannot take any decision in this regard since the move to ban high denomination currency was taken by the government of India to counter parallel economy,” Nepal said during the meeting.
KATHMANDU: Indian Ministry of Finance has formed a committee comprising officials from the ministry and Reserve Bank of India to do groundwork for providing exchange facility to Nepal.
The committee will suggest to the leadership of the finance ministry to what extent and how they would be able to provide a way out to surrender Indian banknotes that are in Nepal.
“The government of India may provide exchange facility up to a certain limit to the general people based on the recommendation of the committee because Indian currency has been legally circulated in Nepal for the last two years after the Indian government allowed a person to carry up to INR 25,000 in 500- and 1,000- denominations,” a high level source at the NRB said.
Transporters facing hassles, cargo stuck
KATHMANDU: Indian transporters ferrying Nepal-bound cargo via road are facing hassles following the ban on high denomination Indian currency notes in India.
Cargo brought from Kolkata has been stranded at several places, as truck and lorry drivers carrying INR 500 and INR 1,000 are unable to exchange the high-denomination notes.
Around 50 to 55 per cent of Nepal-bound cargo is ferried via road. As the cargo-loaded trucks are stranded at several places, it has hit the release of cargo from the port, according to Rajan Sharma, chair of Transit and Transport Committee at Federation of Nepali Chambers of Commerce and Industry.
Kolkata port authority slaps additional charges if cargo ferried via road is not dispatched from the port within seven days.