Print Edition - 2017-12-13 | MONEY
IC shortage hampers trade, life in Birgunj
Dec 13, 2017-
A shortage of Indian currency (IC) notes in the border town of Birgunj has seriously affected business and the life of the general public.
Traders in the business hub of Province 2 have not been able to get adequate
Indian banknotes from the branch office of Nepal Rastra Bank (NRB).
Long queues of people seeking IC form daily in front of the branch office of the country’s central bank. People are allowed to exchange only IRs2,500 per week. Due to high demand and limited stock of Indian banknotes, NRB has introduced a rationing system.
There is huge demand for Indian banknotes from travellers going to India for education, pilgrimage, health care and tourism, among other purposes. However, the central bank, commercial banks and money changers have not been able to fulfil the requirement. This has led to a flourishing black market for Indian currency notes. Black marketers deposit Nepali rupees in Nepali banks and hop across the border to withdraw IC from ATMs in India. They sell IC to the general public by charging Rs4,000 per IRs100,000. Such black marketers are rarely nabbed by the police.
The IC shortage has persisted for around four years in Birgunj. The shortage worsens during festive seasons due to the shopping spree that accompanies them. Apart from the general public, traders and industrialists in the region are also having a hard time due to the scarce supply of IC notes.
According to Pradeep Kumar Kedia, former president of the Birgunj Chamber of Commerce, many traders and industrialists require IC while conducting daily transactions. “For example, we have to make payment in IC to transporters after importing goods from India,” said Kedia. “Also, during the festive season, we have to pay Indian workers in IC as they return to their country to celebrate the holidays.”
The problem intensifies during festivals like Chhath and Holi when a large number of Indian labourers return to their country for the holidays, he added. A majority of the factories in the region employ Indian labourers and technicians.
Earlier, when sand and boulders extracted from local rivers were being exported to India, there was ample supply of IC. Exports have been banned for the last three years, and IC has become scarce as a result.
Also, due to prolonged unrest in the Tarai a couple of years ago, the number of Indian tourists visiting Nepal has decreased, further reducing the supply of IC notes.
Published: 13-12-2017 07:34