India asks for stricter INR exchange modality
Kathmandu, January 16
The government of India has sought an effective and more stringent modality to provide exchange facility for demonetised Indian banknotes to Nepal.
During the talks with Nepal Rastra Bank deputy governor-led delegation in New Delhi last week, an inter-agency committee (comprising officials from Ministry of Finance, Ministry of External Affairs and Reserve Bank of India) had shown concerns over chances of misuse of facility by the Indian nationals and asked NRB to prepare such a modality to plug all the possible loopholes.
Deputy Governor Chintamani Shiwakoti-led panel had held discussions with the inter-agency committee of the government of India on Thursday and Friday of last week, during which, the panel had also presented a modality that had been prepared to assure the Indian government that only genuine people would be able to avail the exchange facility.
"In this regard, the Indian government authorities have provided some feedback to the Nepali delegation," said Bhisma Raj Dhungana, executive director of the NRB. "We will develop a more stringent modality based on the feedback of the Indian authorities and send it to the Indian government officials at the earliest."
It is reported that the government of India will announce exchange facility for Nepal only after the modality is finalised.
During the talks, Nepali delegation had tried to assure the Indian authorities that NRB would handle the facility (if given) effectively, considering the Indian government's serious efforts to counter the parallel economy.
The modality that NRB had presented included provisions like the demonetised notes circulated in the country would be collected only through the banks and financial institutions. Anyone wishing to exchange the high denomination Indian notes would have to give details of past three generations, disclose source of income and declare that the information is genuine. More importantly, any person found to have provided wrong information would be penalised under Foreign Exchange (Regulation) Act of the country.
The delegation had also informed the Indian authorities that the central bank is planning to develop a system for cross-checking and ensuring that a single individual does not deposit Indian banknotes in multiple banks and those trying to do the same would be barred from availing the exchange facility.
Apart from Dhungana, the NRB deputy governor-led panel comprised Joint Secretary of the Ministry of Finance Aanand Raj Dhakal; and Economic Minister at the Nepali Embassy in New Delhi Krishna Hari Puskar.