A team of officials led by Nepal Rastra Bank deputy governor Chintamani Siwakoti left for the Indian capital on Wednesday to sort out problems faced by Nepalese citizens possessing scrapped Indian currency notes of Rs 1,000 and Rs 500 denominations.
India’s finance ministry wrote to Nepal last week to propose a date for a meeting of officials of the two sides to resolve the matter. The Nepali side, in its response, sought a meeting on Thursday, officials said.
Siwakoti, who heads a technical panel formed to hold talks with India on the issue, is expected to meet senior officials of the Reserve Bank of India and, if required, finance ministry officials.
India has set March 31 as the deadline for exchanging the demonetised notes, and reliable estimates suggest scrapped Indian currency worth more than Rs 36 million is present within Nepal’s banking channels. When the huge amount outside banking channels is included, the figure runs into billions of rupees, sources said.
According to Nepal’s central bank, the Nepalese officials will ask their Indian counterparts to allow the notes to be exchanged through banking channels. “We will ask them to provide an exchange facility for up to Rs 25,000 in the banned denominations,” Siwakoti told the media ahead of the visit.
The panel led by Siwakoti has suggested measures to ease the exchange of notes and developed software to facilitate and authenticate exchanges.
The Nepal Rastra Bank plans to collect scrapped Indian notes from Nepalese citizens and send them to the Reserve Bank of India for verification before offering the equivalent amount in Nepalese currency. Nepalese citizens will have to open bank accounts in BFIs and deposit the demonetised notes.
The Nepalese delegation, Siwakoti said, will also ask Indian authorities about the status in Nepal of new Indian notes of Rs 500 and Rs 2,000 denominations.
Nepal is set to receive Indian notes of Rs 100 denomination worth one billion rupees to overcome a shortfall and Siwakoti’s team will request the Indian government to increase the annual quota of Indian currency supplied to Nepal. Currently, India supplies Rs 6.2 billion in cash to the Nepal Rastra Bank every year.
India and Nepal have an open border and Indian currency is widely accepted across the country, especially at markets and villages along the frontier.