Even as President Pranab Mukherjee is in Bhutan on an official visit, there are strong moves afoot in the Narendra Modi government to legalise all Indian currency notes in Bhutan and Nepal.
While Indian currency upto Rs 100 is already legal tender in the two countries, the move to legalise Rs 500 and Rs 1,000 notes will render all Indian currency valid in the two neighbouring countries.
Highly-placed sources told HT that there was a meeting hosted by the department of economic affairs on Monday to discuss the issue. It had top officials from the Directorate of Revenue Intelligence (DRI), Reserve Bank of India, besides the finance ministry.
“For all practical purposes, the issue was agreed upon in principle. After the PM clears it, the government will soon make an announcement to that effect,” the sources said.
“Only DRI raised concerns that legalising Indian currency notes in Nepal would result in further proliferation of fake Indian currency notes for which Nepal is a hotspot. The meeting ended with the assurance that such concerns would be taken care of,” the sources added.
The move acquires significance before the 18th SAARC Summit takes off in Kathmandu from November 22-27 which will be attended by PM Modi.
After decades of wooing the West, India’s foreign policy set off on a new direction when Modi, underlining the country’s intent to closely engage with its neighbours than ever before, invited the eight South Asian neighbours for his government’s swearing-in ceremony after a resounding election victory. He followed it up with several visits to these countries. During his Nepal visit, Modi had told Nepali legislators: ‘Borders must be bridges not barriers.”
The move enabling a single currency is expected to ease cross border trade between the neighbours and also facilitating tourism in the region although there will be prescribed limits to the amount of Indian currency one can carry around.