INR 500, 1,000 notes worth Rs 33.6 million in Nepal, central bank tells RBI

Nepal has sought exchange facility worth INR 33.6 million with Reserve Bank of India against the high denomination Indian currency notes INR 500 and INR 1,000 that are in holding of Nepal Rastra Bank, banks and financial institutions and money exchange facilities. NRB today submitted the figure to RBI and requested RBI to provide exchange facility for the general public similar to the exchange facility of up to INR 4,000, which has been granted to Indian nationals, said NRB Governor Chiranjibi Nepal. The country has already banned the high denomination Indian currency notes on Wednesday following the Indian government’s move to ban INR 500 and INR 1,000 notes to counter the parallel economy in India. NRB has written to RBI seeking exchange facility of high denomination Indian currency notes in response to a communication sent by RBI that sought the actual amount of such currency in Nepal. “We have initiated the process of surrendering high denomination Indian currency notes in our financial system,” NRB Governor Nepal told THT. According to Nepal, he also spoke to his Indian counterpart Urjit Patel and requested him to facilitate the process of surrendering such bank notes. “In response, he assured he would convey NRB’s message to Indian Ministry of Finance and do the needful as per the instruction from the government,” said Governor Nepal. “As the decision has been taken by the government, RBI cannot take sole decision to provide exchange facility to Nepal. This is why we have requested the government to initiate the process through the diplomatic channel,” said Nepal. NRB has also written to the Ministry of Foreign Affairs and Ministry of Finance to talk to the Indian government to seek a way to surrender the banned Indian currency notes that are in Nepal. Authorities at MoFA said a diplomatic initiative for the purpose had already been started. Ministry of Finance is also preparing to write to its counterpart, according to Baikuntha Aryal, chief of International Economic Cooperation Coordination Division under the ministry. “Discussions are being held and most probably we will write to them tomorrow.” Though the government has initiated the process of getting exchange facility for the banned INR notes that are in Nepal’s financial system, it is still uncertain whether or not the general public will get the exchange facility. It is assumed that families of migrant workers in India, students studying in India and those frequenting India for reasons such as health check-up, may be in possession of Indian bank notes of INR 500- and 1000-denominations. Source: The Himalayan Times