KATHMANDU: Nepal Rastra Bank (NRB) has said that it is in touch with the Reserve Bank of India (RBI) in order to resolve the problem resulted in Nepal due to the Indian government’s decision to ban Indian currency notes of 500 and 1000 denominations. NRB Deputy Governor Chintamani Shiwakoti told Republica that he talked with RBI Deputy Governor R Gandhi on Wednesday over the phone on what to do with the 500 and 1000 Indian currency notes in Nepal.
Though the NRB officials say the central bank has taken initiative to return the demonetized notes to India, it is still uncertain about the fate of such notes that Nepalis have been holding. Unlike Indian public who will be able to exchange 1000 and 500 denominated IC notes until December 30 with banks, the NRB has already issued a directive restricting the use of those notes in Nepal.
“India has decided to not accept such notes. In this scenario, there is nothing we can do right now,” said Shiwakoti. “However, I talked with the RBI deputy governor about the fate of the IC notes that we have in Nepal. Since the Government of India has taken the decision to demonetize 1000 and 500 denominated notes, the problem of IC in Nepal is not going to be resolved by convincing the RBI alone,” he added. “We will let the public know if we hear back from the RBI and Indian government if they decide to accept the bank notes.”
The NRB has also sought the help of Ministry of Finance as well as the Embassy of India in Kathmandu to return Indian demonetized notes from Nepal, according to a highly-placed source at the NRB. While a Nepali can carry up to Indian currency up to 25,000, it is illegal to hold the foreign currency including Indian currency, according to NRB officials. People who have the foreign currency including Indian currency should immediately exchange it, said Bhisma Raj Dhungana, the executive director at Foreign Exchange Department of the NRB. According to Shiwakoti, the RBI deputy governor has inquired about the amount of notes that the NRB possessed. “We do not have exact figure of the amount that we have. We have asked bank and financial institutions as well as money changers to report us about the amount of the Indian currency that they have,” said Shiwakoti.
