NRB gets nod to avail exchange facility of INR as proposed by RBI

Kathmandu, April 11

The Ministry of Finance (MoF) has allowed Nepal Rastra Bank to avail exchange facility of up to INR 4,500 per individual holding demonetised Indian banknotes as proposed by the Reserve Bank of India (RBI).

The MoF today instructed NRB to avail the facility as proposed by RBI and also request for further exchange facility

as proposed by Nepal of up to INR 25,000, according to Ananda Raj Dhakal, joint secretary of MoF.

NRB had asked the government whether or not to avail the exchange facility of banned Indian currency as proposed by RBI, following the meeting of NRB and RBI officials in the Capital on March 26 and 27.

During the meeting, NRB had proposed exchange facility of up to INR 25,000 for people holding the demonetised Indian banknotes in Nepal citing that both the governments had allowed individuals to carry the high denomination Indian currency up to the aforesaid amount while travelling to Nepal from India and vice versa.

However, the RBI delegation, led by its Executive Director Deepali Pant Joshi, had asked NRB to allow exchange facility of only up to INR 4,500 within March so that there would be no chance of flow of the banned Indian banknotes to Nepal.

“Though the government has green-lighted the exchange facility as proposed by RBI, it is uncertain whether RBI will provide the exchange facility immediately,” said Bhisma Raj Dhungana, executive director of Foreign Exchange Management Department of NRB.

As per Dhungana, NRB will correspond with RBI following the government’s consent to avail proposed exchange facility and issue a notice to collect demonetised Indian banknotes if RBI responds positively.

As per Dhungana, both the notice and collection periods will be quite short. “RBI had shown reservations against

extending the collection time. During the meeting held in March, they told us to collect the demonetised notes within five days.”

A notice will be issued by NRB after correspondence with RBI, according to Dhungana.