NRB seeks G2G talks on INR exchange

Kathmandu, June 28

Nearly eight months after the Indian government scrapped high value Indian banknotes, Nepal Rastra Bank (NRB) is still scrambling to resolve the issue of the now illegal currency that is in the country.

As several rounds of meetings held between NRB and Reserve Bank of India (RBI) officials to sort out the issue have yielded no positive outcome, the central regulatory and monetary authority has now requested the government to resolve the matter through government-to-government (G2G) talks.

In a shock move, the Indian government had cancelled the legal tender of INR 500 and INR 1,000 in November last year.

During the meeting held in Kathmandu in last week of March, the central bank of India had offered to provide exchange facility of up to only INR 4,500, against the facility of INR 25,000 per person sought by NRB. But considering that the issue had dragged on too long, NRB had relented and written to RBI to provide the facility as agreed during the meeting.

“We have not received any response from RBI,” said Bhisma Raj Dhungana, executive director at the Foreign Exchange Management Department of NRB. “Hence, this issue needs to be settled from government-to-government level talks.”

Earlier, 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.