Illegal money exchange on Indo-Nepal border
There is an unprecedented rush for the Indian rupee in Nepal - possibly fuelled by talk of a devaluation of the Nepali currency - giving rise to unauthorised money-changers on this side of the border.india Updated: Jun 05, 2010 12:49 IST
There is an unprecedented rush for the Indian rupee in Nepal - possibly fuelled by talk of a devaluation of the Nepali currency - giving rise to unauthorised money-changers on this side of the border.
The exchange rate has remained unchanged for the last 17 years at Nepali Rs.160 for Indian Rs.100. But Nepalis are shelling out Nepali Rs.164 for every Rs.100 - that is an additional Nepali Rs.4 - to the illegal moneychangers.
"We are doing good business as an increasing number of Nepali people come over to this side to convert their Nepali currency into Indian," said Tulsi, a money-changer operating from a table on a dirty roadside in the border town of Rupaidiha in Bahraich district.
Indian currency has become such a hot commodity in the neighbouring country that even the 1,000 rupee and 500 rupee notes, which are officially banned in Nepal, are in huge demand, say the money changers.
ATMs installed by Indian banks in Nanpara town, about 30 km from Rupaidiha, are also being emptied out much faster. Even though Rupaidiha generates business worth crores in a day, there is not a single ATM in the town.
An Indian bank branch manager, A.U. Khwaja, said: "I have been observing an increasing trend in withdrawals from our branch over the past four to five months."
Suresh Madhesia, a businessman in Rupaidiha, attributes the rise in demand for Indian currency in Nepal to a recent statement by the Nepal Reserve Bank chief about a "possible devaluation" of the Nepali currency.
"Since businessmen in Nepal were aware of the possibility of devaluation of the Nepali currency, there was a growing tendency to hoard the Indian rupee," he said.
Superintendent of Police Ram Bharose said: "I'm not aware of any such illegal activity, but I will have it probed."
Perhaps the absence of an "authorised" money changing counter in any bank on the Indian side is also responsible for the growth of the money changing business.
"I took to this business about four months back and it has given me good returns," declared Akram, who sits on a table adjoining Tulsi's, outside a sugarcane juice stall, barely 200 metres from the round-the-clock three-tier "vigil" of the customs, border police and state cops.
Ram Adhar, who does the same business from a tarpaulin shelter on the other side of the road, is equally happy with the quick buck he makes instead of what the day's toil used to fetch him as a daily-wager with a wholesale sugar dealer.
"I change about Rs.10,000 in a day, which leaves a neat Rs.400 in my pocket at the end of every day. It is four times of what a day's hard labour would get me," he points out.
Nepalganj on the other side of the border does have a few official money-changers, but there too a premium is openly demanded.
In any case, only limited currency can be exchanged at the "authorised" counters with the result that the illegal ones are thriving.
"We are feeling the pinch on account of this premium on the Indian rupee, but it is beyond our control," remarked Manoj Shreshtha, a trader in Nepalganj town.
"After all, we are a land-locked nation and Uttar Pradesh, being the closest from our side, remains the most favoured destination for every Nepali living in the western and southwestern part of our country," he said.
"Be it medical treatment, foodgrains or other daily requirements, we have to fall back upon Bahraich, Gorakhpur or Lucknow, where we need the Indian rupee," he said.