Print Edition - 2016-11-30 | MONEY
Nepalis demand NRB increase Indian currency exchange limit
Nov 30, 2016-
Long queues of people bearing anxious looks were seen on the premises of Nepal Rastra Bank’s (NRB) Thapathali branch on Tuesday, as they tirelessly waited to fetch Indian bank bills to travel to India for various reasons.
One of them in the snaking queue was Sujan Gurung of Swayambhu who was visiting India for medical treatment of his mother.
“I am going to Delhi tomorrow with my mother, but I don’t know how I’m going to make it,” said Gurung. “I’ve heard the bank is providing up to IRs10,000 to each person, but I don’t know whether that would be sufficient.” He’s also worried, as he has heard that “many ATMs in India are no longer dispensing cash”.
Thousands of people like this grim-faced youth are currently facing two-pronged problem. First, they have to wait in serpentine queue in front of NRB’s counter to exchange Nepali notes with Indian currency. Second, the over-the-counter exchange facility extended by the bank is not enough for many to cover expenses in India.
What adds to their worries is the uncertainty about getting cash in India, where many ATMs are said to have run dry of banknotes.
Currently, NRB is providing exchange facility for up to IRs2,000 to each person travelling to India. It extends exchange facility for up to IRs10,000 if people can submit documents to justify the need for additional cash.
People travelling to India for various purposes, especially medical treatment and education, are now asking NRB to increase the exchange limit, stating IRs2,000 to IRs10,000 is not sufficient.
NRB has, however, said it can’t do so as Reserve Bank of India has stopped supplying Indian banknotes, while the supply of Indian currency from the domestic market has also petered out. “Since India has stopped the supply of its currency, we have to be careful while providing exchange facility to our citizens,” said Bhisma Raj Dhungana, head of NRB’s Foreign Exchange Management Department.
After IRs500 and IRs1,000 were pulled out of circulation, India is facing shortage of cash of lower denominations as well. So chances of the southern neighbour easing the supply of currency of smaller denominations anytime soon are slim, according to Dhungana.
This problem of Indian currency shortage has lately started hitting business activities in border towns as well. “Many businesspersons travelling to India are facing difficulties, as electronic cards are not widely accepted in India,” said Hari Bhakta Sharma, president of the Confederation of Nepalese Industries. “Although big industries have not faced difficulties to the extent of going defunct, small factories and trading enterprises at border towns are facing hardships.”
Considering these problems, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex body of the private sector, recently asked the government to provide sufficient Indian currency to businesspeople and traders so that they do not face problems in meeting daily expenses.
Although payments for majority of imports are settled through letters of credit and other banking instruments, businesspersons do need cash to cover costs related to transportation and emergency imports of machinery parts, according to the FNCCI.
Published: 30-11-2016 09:45