Kathmandu, March 27

A two-day meeting held here between the Nepal Rastra Bank and Reserve Bank of India to sort out the exchange facility of demonetised Indian banknotes to Nepal ended inconclusively today.

The meeting failed to make any headway as the Indian side refused to budge from their stance of providing exchange facility only up to INR 4,500 per individual holding the now banned notes and also sought slight modification in modality prepared by the NRB to avail the exchange facility.

Nepal has proposed exchange facility of up to INR 25,000 for people holding 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.

The Indian delegation also differed on the proposed INR exchange modality — one-month notice calling individuals to deposit demonetised INR notes in banks in the capital and five major border points with India — Nepalgunj, Birgunj, Bhairahawa, Biratnagar, Kakadvitta and Dhangadi.

NRB had proposed that the banknotes collected from border points would be deposited at Indian banks and had sought exchange facility from the same banks in coordination with the RBI.

However, the RBI team was opposed to these ideas and urged providing only a two-day prior notice and only a five-day window for collection of the demonetised banknotes. The delegation of RBI led by its Executive Director Deepali Pant Joshi added that RBI could not provide exchange facility to Nepal through Indian banks located near the border because ‘all the collected banned notes will have to be re-verified by the RBI office in Kolkata’.

Owing to all these issues, no decision was taken during the meeting, according to NRB Deputy Governor Chinta Mani Siwakoti, who had led the Nepali team during the talks.