Print Edition - 2015-01-24 | MONEY
1,000-, 500-rupee Indian banknotes allowed in Nepal
Jan 23, 2015-
India has decided that individuals from India could carry 1,000- and/or 500-rupee Indian currency (IC) notes to Nepal, up to the limit of IRs 25,000.
The Reserve Bank of India (RBI) on Thursday amended a regulation on “Export and Import of Indian Currency” to allow individuals to use the notes in Nepal and Bhutan.
Earlier, the Indian central bank had banned the use of the notes in Nepal, citing security concerns. Travelers were allowed to carry with them IC notes up to IRs 100 denomination.
RBI stated in its amendment that the decision was taken in regard to a view to mitigating the hardship of individuals visiting from India to Nepal or Bhutan.
The RBI move is in line with the announcement of Indian Prime Minister Narendra Modi to relax the use of the higher denomination notes in Nepal during his Nepal visit in November for the Saarc Summit.
Basudev Adhikari, director at Nepal Rastra Bank’s (NRB) Foreign Exchange Management Department, said the NRB would send a proposal to the government next week to lift the ban on the use of 1,000- and 500-rupee IC notes in Nepal through a notice in the Nepal Gazette.
NRB officials say the RBI move will benefit Nepal and Nepalis, especially Nepali workers in India. Currently, Nepali migrant workers have to return back Nepal with IC notes with smaller denominations, which makes it difficult for them to keep their earnings away from thieves and pickpocketers en route. Also, many migrant workers have faced jail in Nepal for carrying IC notes in IRs 1,000 and IRs 500 denominations.
“The RBI move will definitely give relief to Nepali migrant workers,” said Adhikari. “This will also help small-scale cross-border trade.”
The RBI move is also expected to address the shortage of IC notes in Nepal, with more Indian tourists expected to visit Nepal.
Due to the shortage of Indian banknotes, black-marketers have been charging as high as Rs 170 for IRs 100, while the official exchange rate is Rs 160.
He said NRB has written to RBI for exchange facility of notes in IRs 500 and IRs 1,000 denominations between the two central banks. “Once these high denomination notes are collected with NRB, RBI will accept them, if RBI endorses our proposal,” said Adhikari.
Published: 24-01-2015 09:23