NRB lowers INR exchange limit
Kathmandu, November 24
People seeking exchange facility for Indian currency in physical cash will be able to receive only up to INR 25,000 as Nepal Rastra Bank today fixed the upper limit due to limited reserve of physical cash in the country.
NRB has announced the limit for exchange in physical cash as its counterpart Reserve Bank of India has said they are not in a position to give additional INR 100-denomination banknotes to Nepal before January because RBI is also struggling to manage the physical cash in India, said Janak Bahadur Adhikari, executive director at Banking Office of NRB.
NRB has lowered the exchange facility limit in every category. Those who are travelling to India for medical treatment for serious health issues, such as cancer, kidney disease and heart problems, will be able to get a maximum of INR 25,000. Earlier, such patients were allowed to carry up to INR 50,000.
Likewise, pilgrims, students and those travelling for medical checkup (normal cases) will get INR 10,000 only. The exchange facility for the aforementioned category was INR 25,000 earlier.
Travel documents and other supporting documents are mandatory to avail of the exchange facility, according to Adhikari. “However, there is no limit in account settlement, which means people can use other modes of payment like draft and telegraphic transfer if they have to make payment of higher amount in India.”
Those who come to NRB seeking exchange facility without any supporting documents and travel documents will get only INR 2,000 after submitting a photocopy of their identity card (citizenship certificate or passport) as compared to INR 5,000 earlier.
NRB has circulated this decision to its seven regional offices. If exchange facility in physical cash is limited to INR 500 million per month, the physical cash reserve with the central bank would be enough to serve the demand for six months, according to Adhikari.
Moreover, there is uncertainty about whether RBI will be able to dispatch physical cash to Nepal or not till January. Of the country’s total foreign exchange reserve worth Rs 1,039.21 billion till mid-October of this fiscal, the share of Indian currency stood at 21.9 per cent, according to NRB.
Meanwhile, the issue of the impact of the demonetisation of INR 500 and INR 1,000 banknotes on Nepal, Bhutan and Bangladesh, whose economies are somewhat linked to the Indian economy, was raised today in the Rajya Sabha, the upper house of the Indian Parliament.
Samajwadi Party lawmaker Naresh Agarwal said since Nepal’s economy was linked to India’s and since Indian businessmen also did business in Nepal, they could also be affected due to the ban of INR 500 and INR 1,000 banknotes.
“How can they do their business?” lawmaker Agarwal wondered while speaking in a debate on Indian government’s move to demonetise higher denomination notes.
KATHMANDU: Nepal Rastra Bank has requested those preparing to travel to India for medical purposes or pilgrimage to postpone their visit, if possible, till the cash crunch situation eases.
This is in consideration of the fact that electronic card users would be able to withdraw only up to INR 2,000 from ATMs at one time.
The central bank has also requested those travelling to Nepal from India not to bring back the new INR 500 and INR 2,000 bills because no decision regarding the new notes has been taken at the government level.