Demonetisation: RBI to allow Nepalis to exchange up to 4,500 rupees per person

The Indian proposal has made Nepali side nervous as India had earlier allowed carrying of 25,000 rupees per Nepali citizens.
Nepal’s central bank has been claiming that its financial system is holding Indian rupees worth 33.6 million parked at banks, financial institutions and NRB itself.(AFP File)
Nepal’s central bank has been claiming that its financial system is holding Indian rupees worth 33.6 million parked at banks, financial institutions and NRB itself.(AFP File)
Updated on Mar 26, 2017 09:01 PM IST
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Hindustan Times, Kathmandu | ByAnil Giri

A visiting team of Reserve Bank of India on Sunday hinted it would allow Nepali nationals to exchange banned Indian currency of up to 4,500 rupees per person.

The Indian proposal has made Nepali side nervous as India had earlier allowed carrying of 25,000 rupees per Nepali citizens.

A delegation led by RBI executive director Dipali Pant Joshi  held talks with deputy governor of Nepal Rastra Bank Chintamani Siwakoti in Kathmandu and offered to provide exchange facilities for up to 4,500 rupees of banned Indian bills and gave a one-week window to complete the exchange facilities.

If Indian side insists on the decision, many Nepalis who have been holding banned Indian banknotes of 500 and 1000 denominations will suffer.

The next meeting is on Monday, said officials at Nepal Rastra Bank, the central bank of Nepal.

Nepali side conveyed that it was impossible to exchange banned Indian bills within a week as Nepal is yet to take an inventory of such notes possessed by Nepalis.

The RBI team said it was ready to exchange Indian notes in Nepali banking and financial institutions immediately, but bills held by individuals should be exchanged through the banking system.    

This is the second time the Indian team visited Nepal to hold talks on allowing exchange facilities to Nepalis holding demonetised Indian banknotes.  Earlier, the Indian team had expressed fears about Nepal becoming a “clearing house” to channel illegally amassed banknotes into Indian financial system.

India’s demonetisation move had hart many Nepalis, specially those who earn a living working as daily wage labourers in India, those visiting India for medical treatment, and those who study and purchase goods from Indian markets bordering Nepal.

Nepal’s central bank has been claiming that its financial system is holding Indian rupees worth 33.6 million parked at banks, financial institutions and NRB itself.

But the actual stock of banned Indian notes is expected to be much higher because Nepalis were previously allowed to carry Indian rupees in the banned denominations worth up to 25,000 per person.

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