Print Edition - 2016-12-01 | MONEY
Black-marketeering of Indian currency rampant
Dec 1, 2016-
Black-marketeering of Indian currency (IC) has increased in areas bordering India due shortage of Indian rupee bills.
Nepalis travelling to India are paying up to Rs200 for IRs1,000 to local money changers, although Nepal Rastra Bank (NRB), the central bank, has allowed them to charge only Rs4 per IRs1,000.
The travellers have accused the money changers of “running a cartel”. “NRB offers exchange facility worth only IRs1,200,” said Ram Bahadur Tumbapo of Dharan, who was travelling to India’s Siliguri for medical treatment. “Therefore, I don’t have
other option but to buy IC at higher rates.”
The money changers, however, said they were not getting enough IC notes from NRB and were buying the currency at higher rates. “As we have bought IC by paying premium charge, we can’t sell at cheaper rates,” said a person running a money changer.
The local administration and NRB—which is responsible for monitoring the
money exchangers—are mum over the rampant black-marketeering.
Until last week, the NRB branch had been providing exchange facility up to IRs2,000 per person, but the limit has not been lowered to IRs1,200. NRB’s regional office in Biratnagar said it lowered the exchange limit after its head office decreased IC supply. “There are long queues of people seeking IC every day,” said Dipen Baral, an official at NRB’s Biratnagar office. “We do not have option but to ration.”
NRB’s central office has also said it cannot raise the exchange limit as Reserve Bank of India has stopped supplying IC and neither is it getting any from the market. “Since, India has stopped IC supply, NRB has to be calculative while providing exchange facility to the citizens,” according to Bhisma Raj Dhungana, head of NRB’s Foreign Exchange Department.
After India pulled IRs500 and IRs1,000 denomination banknotes out of circulation, there is shortage of cash of lower denomination even in India. So chances are slim the Southern neighbour will ease the currency supply any time soon. The private sector has also complained about difficulties they are facing due to IC shortage as business activities at border towns have slowed down.
The Federation of Nepalese Chamber of Commerce and Industries (FNCCI), the apex body of the private sector, has also asked the government to provide IC notes to businesses and traders to meet their daily expenses.
Published: 01-12-2016 08:42