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Nepal prepares software to exchange banned Indian notes

Nepal's central bank has developed a software to facilitate exchanging banned Indian notes in the country

world Updated: Dec 18, 2016 15:57 IST
Billions of banned Indian rupees in the 500 and 1000 denominations, within and outside the banking system in Nepal, were affected by demonitisation in India.
Billions of banned Indian rupees in the 500 and 1000 denominations, within and outside the banking system in Nepal, were affected by demonitisation in India.(HT Photo)

Nepal's central bank has developed a software to facilitate exchanging banned Indian notes in the country.

Billions of banned Indian currency in the 500 and 1000 denominations, within and outside the banking system in Nepal, were affected by demonitisation in India. Even Nepali banks are facing serious shortage of 100-rupee notes as very small amount is now permitted to people who want to visit India. People are standing for hours outside the Nepal Rastra Bank (NRB) to exchange Indian currency.  

The software was developed by NRB as India has not responded to Nepali government’s proposal to provide exchange facility to Nepalis holding Indian currency in the scrapped denominations.

“We have developed separate software to facilitate the exchange of banned Indian bills and template of exchange modality has been sent for approval from Reserve Bank of India,” NRB Deputy Governor Chintamani Siwakoti said on Sunday.   

During discussions with NRB, officials from RBI indicated it would only allow exchange facilities for up to 25,000 Indian rupees to each Nepali citizen.

“ A Nepali citizen can exchange only 25,000 Indian rupees and this is the limitation. If anyone is found having exchanged more than one time, the amount will be seized,” said Siwakoti.  

As per the new template developed by the NRB and forwarded to RBI, any interested Nepali citizen wanting to exchange banned Indian notes has to fill a form, submit copy of the Nepali citizenship and other personal details which will be uploaded in the software. Anyone coming for the second time after exceeding the limit on exchangeable amount will be barred from such facilities with the help of the software.

As soon as India gives nod for using the software to avoid multiple exchanges, the NRB will distribute it across Nepal to its branches and will collect the banned Indian notes.

Siwakoti is leading the Nepali delegation to India soon to resolve the problem.

As thousands of Nepali citizens visit India on a daily basis crossing the open border for various purpose, Nepal is faced with a double crisis. On the one hand, Nepalis have been facing hardship to get even 100-rupee Indian bills while on the other hand, India has not given nod to exchange facilities.

Until April of next year, we are not going to get the Indian notes, Siwakoti said, citing RBI officials.

Many Nepali students, pilgrims, those who go for treatment in India, traders and businessmen are facing the currency crunch.

“ But we have enough reserve of Indian 100 rupee bills, so there is not much worry,” Siwakoti said.

Prime Minister Pushpa Kamal Dahal, Finance Minister Krishna Bahadur Mahara and NRB Governor Chirinjivi Nepal spoke with their Indian counterparts several times in the past. 

Hundreds of thousands of Nepalis are holding big chunks of scrapped Indian banknotes, including many who earn a living as daily wage labourers in India.