The Indian government needs to make a new policy decision to allow Nepalis to exchange the banned Indian bank notes in Nepal, and it could take some time, officials here said.

As of now, India has said that it cannot exchange banned Indian bank notes of 500 and 1,000 denominations that are beyond the formal banking channel.

Nepali Embassy in India is in consultation with the Indian side at various levels to ease the problem faced by Nepalis seeking to swap the now-defunct Indian bank notes with legal bills.

During one of these conversations, officials of the Reserve Bank of India (RBI) said a decision needs to be made at the “executive level” to enable Nepalis to exchange the banned Indian bank notes in Nepal, according to Krishna Hari Pushkar, economic counselor at the Nepali Embassy.

This is an indication that the Indian central bank will not be able to provide the exchange facility until a decision is made at the higher level of the government.

Earlier on Monday, Prime Minister Pushpa Kamal Dahal urged his Indian counterpart to arrange exchange facility in Nepal, as Nepalis have quite a big stock of Indian notes of 500 and 1,000 denominations.

Also on Monday, Finance Minister Krishna Bahadur Mahara also made the same request to his Indian counterpart Arun Jaitly.

Hundreds of thousands of Nepalis, who earn a living by working as daily-wage labourers in India, and those who visit the neighboring country for medical treatment or rely on Indian markets to purchase daily essentials, are said to be holding scrapped Indian bank notes. Besides, people who visit India as pilgrims and those engaged in cross-border trade have kept stock of banned Indian notes.

“There won’t be any problem in providing exchange facility to people who have amassed banned Indian bank notes through genuine sources,” Pushkar quoted RBI officials as saying during the meeting. “But a modality needs to be developed before allowing these people to exchange their notes.”

Along with discussions to provide exchange facility to Nepalis in Nepal, talks are also underway to resolve problems faced by Nepali migrant workers in India who have collected their salary in cash.

“RBI officials have assured that it will make an arrangement soon to allow foreigners, including Nepalis, to exchange banned Indian notes with legal tenders,” Pushkhar said. “Such people will get similar treatment as Indian citizens.”

 Currently, the Nepali Embassy in New Delhi is also in consultation with the Indian Ministry of External Affairs to resolve this issue.