RBI proposes exchange of Rs 4,500 in old notes for Nepalese
The RBI team arrived in Kathmandu on Saturday to hold discussions on extending exchange facilities to Nepalis, who are holding banned Indian banknotes of Rs 500 and Rs 1,000 denominations.
In Short
- Nepalis were previously allowed to carry old notes amounting to Rs 25,000
- The next meeting between the RBI and NRB teams has been scheduled for March 27.
- NRB has claimed that it is holding Indian Rs 33.6 million at various banks and financial institutions
A team of the Reserve Bank of India (RBI) visiting Nepal has hinted that it will allow exchange of up to Rs 4,500 in banned Indian currency notes to Nepali citizens.
As India had earlier allowed Nepali citizens to possess up to Rs 25,000 each, the central bank's proposal has sent waves of nervousness among the Nepali public.
An RBI team led by Dipali Pant Joshi, executive director, RBI, held talks with a Nepali team, led by Nepal Rastra Bank (NRB) Deputy Governor Chintamani Siwakoti, in Kathmandu and offered to provide exchange facilities up to INR 4,500 in banned Indian currency notes and gave one week's window to complete the exchange formalities.
However, the Nepali side has been pushing to arrange facilities up to Indian Rs 25,000. The NRB team has conveyed to the RBI team that it is also impossible to exchange banned Indian notes within a week as the Nepali side is yet to conduct inventory of banned Indian bills possessed by Nepalis. However, the RBI team said it was ready to exchange Indian notes held with Nepali banking and financial institutions immediately but currency notes held by individuals should be exchanged through the banking system.
If the RBI remains adamant over the decision, many Nepali citizens possessing banned Indian rupee notes would suffer.
The next meeting between the two teams has been scheduled for March 27.
DISCUSSION ON EXCHANGE OF CURRENCY
The RBI team arrived in Kathmandu on Saturday to hold discussions on extending exchange facilities to Nepalis, who are holding banned Indian banknotes of Rs 500 and Rs 1,000 denominations. This is the second time that the Indian team has visited Nepal to hold talks on allowing exchange facilities.
Earlier, the Indian team had expressed fears about Nepal being used as a "clearing house" to channel illegally amassed banknotes into the Indian financial system.
The Indian government's November 8 move to demonetise Rs 500 and 1,000 bank notes has caused inconvenience to many Nepalis, especially daily-wage earners and labourers working in India, and those visiting the neighbouring country for medical treatment, studies and purchasing goods from Indian markets in border areas.
Nepal's central bank has been claiming that its financial system is holding Indian Rs 33.6 million at various banks and financial institutions besides the NRB itself. But the actual stock of banned Indian notes is expected to be much higher because Nepalis were previously allowed to carry Indian bank notes of Rs 500 and Rs 1,000 denominations amounting to Indian Rs 25,000.
Also, those residing in areas bordering India usually keep Indian notes of higher denominations as they have to visit Indian markets frequently to buy essential commodities.
(With inputs from IANS)
Also read: Government reveals how much it costs to print new Rs 500, Rs 2000 notes