NRB seeks exchange facility of high-denomination notes from RBI
Kathmandu, January 6
Three weeks after the government banned the use of Indian currency notes of all denominations above INR 100, Nepal Rastra Bank (NRB) has asked Reserve Bank of India (RBI), the Indian central bank, to manage exchange facility of high-denomination Indian currency notes in Nepal.
Along with ensuring exchange facility of high-denomination Indian notes, NRB has also requested RBI to provide exchange facility of more than Rs 78 million Indian currency notes of INR 500 and INR 1,000 denominations that have been stuck at NRB after Indian government demonetised the notes in 2016 intending to curb the flow of black money.
The Cabinet meeting on December 14 had decided to ban high-denomination Indian currency notes of above Rs 100 citing that these notes have not been legalised yet in the country. However, NRB is preparing to ensure exchange facility of these high-denomination notes in Nepal citing that lack of exchange facility of such notes has been troubling Indian tourists visiting Nepal and affecting the hospitality and the entire tourism sector.
“Due to lack of exchange facility for high-denomination Indian currency, the country’s hospitality sector has been affected. Similarly, Indian tourists are also discouraged due to the lack of this exchange facility,” said Bhisma Raj Dhungana, executive director of NRB.
Moreover, Dhungana expressed his optimism that RBI will allow the exchange facility of both old and new high-denomination Indian currency notes for Nepal soon.
When questioned about the Cabinet’s decision to ban Indian banknotes of above Rs 100, Dhungana informed that the government had taken the decision to do so due to the flow of high-denomination Indian notes in the domestic market even though the Indian government had not given exchange facility for such notes in Nepal.
Among others, domestic hoteliers have been demanding the exchange facility of high-denomination Indian banknotes in Nepal citing that lack of such facility will notably affect flow of Indian tourists in Nepal.
“A majority of tourists visiting Nepal are from India. In such a context, the lack of exchange facility for high-denomination Indian currency notes has been affecting their stay in hotels and overall visit to Nepal,” said a hotelier seeking anonymity and urged the government to ensure the exchange facility of such Indian notes as soon as possible.