Nepal asks India to lift 1,000-rupee note ban
Less than a fortnight after an Indian minister was detained in Nepal for carrying banned Indian currency notes, Nepal has reiterated its call to India's banking transaction regulator to lift the prohibition.Updated: Jul 11, 2010 16:16 IST
Less than a fortnight after an Indian minister was detained in Nepal for carrying banned Indian currency notes, Nepal has reiterated its call to India's banking transaction regulator to lift the prohibition.
Yubaraj Khatiwada, governor of Nepal Rastra Bank (NRB), the republic's apex bank, has asked Reserve Bank of India (RBI) Governor D. Subbarao to lift the RBI ban on Rs.1,000 and Rs.500 Indian rupee notes in Nepal.
The ban came into effect more than a decade ago after a growing racket in fake Indian currency as well as suspected routing of money to fund terrorist activities through Nepal.
However, the NRB says that besides posing hardship to bonafide travellers from Nepal to India, the restriction is creating severe trouble for Indians coming to Nepal as well.
Most tourists and other Indian visitors to Nepal are unaware of the currency ban due to the lack of any dissemination of the information in India.
A case in point is the detention of Indian Minister Imkong L. Imchen last month.
Imchen, home minster of India's Nagaland state, was held at the Tribhuvan International Airport in Kathmandu while returning to New Delhi after attending a wedding in the Nepali capital.
The minister was carrying nearly Rs.900,000 in banned Indian currency notes, unaware that anyone found in possession of the notes in Nepal was liable to be jailed or imprisoned for five years.
Just before the Imchen incident, Khatiwada had met Subbarao in Thimphu in Bhutan where both had gone to attend the 39th meeting of the Asian Clearing Union.
Khatiwada told journalists in Kathmandu this week that he had described the difficulties the ban was causing and asked the RBI chief to ask Indian authorities to lift the ban.
Besides the hardship suffered by individuals, both the governments of India and Nepal are losing money due to the ban.
Currently, Nepal has over Rs.30 million banned Indian currency notes seized from various individuals. There is also a large but unspecified amount being held in different courts of Nepal hearing currency regulation violation cases.
Nepal can only consign the money to incinerators since RBI has refused to take the money back. The Indian joint venture banks operating in Nepal have also refused to exchange the money, saying it would be illegal.
First Published: Jul 11, 2010 16:05 IST