Indian lawmakers inquire about Nepal’s decision to ban Indian bank notes

A Cabinet meeting two weeks ago had decided to  prohibit the use of Rs 200, Rs500 and Rs 2,000 Indian currency notes in Nepal, making the use of Indian notes of denominations higher than 100 illegal

Jan 5, 2019-Lawmakers at Upper House of Indian parliament, Rajya Sabha, have expressed interests about the recent decision of Nepal government to ban the use of high denomination Indian currency notes in Nepal.

A Cabinet meeting two weeks ago had decided to prohibit the use of Rs 200, Rs500  and Rs 2,000 Indian currency notes in Nepal, making the use of Indian notes of denominations higher than 100 illegal.

In the meeting of Rajya Sabha on Thursday, Samajwadi Party lawmakers Ravi Prakash Verma and Neeraj Shekhar demanded the Indian government, through the Ministry of External Affairs (MEA), clarify whether “Government of Nepal has banned the Indian currency notes in Nepal; if so, the details thereof and the reasons therefor.”

The lawmakers also sought clarification from the MEA-whether the MEA has taken up the matter with Nepali authorities; if so, the details thereof and the response of Nepal Government thereto; and if not, the reasons therefor.

Responding to the query put forth by the lawmakers, Indian Minister of state in the Ministry of External Affairs Gen VK Singh (retd) pointed out the Nepal government’s decision made on December 10, 2018 to publish the notice on national gazette not to use, carry and keep Indian currency notes of higher denominations. 

He further clarified that the India has not held any talks with Nepal regarding the matter.

Addressing the concerns of the lawmakers, State Minister Singh said, “In 2015, the Reserve Bank of India (RBI) issued a circular allowing individuals travelling from India to Nepal to carry Indian currency notes of Rs500 and Rs1,000 denominations upto a limit of Rs25,000,” adding that Nepal Rastra Bank (NRB) had also issued a similar circular to that effect.

Minister Singh also pointed out that after the Indian government, in November 2016, decided to demonetise Indian currency notes of Rs. 500 and Rs. 1,000 denominations, Specified Bank Notes, the Nepal Rastra Bank had disallowed the usage of all such demonetised notes in Nepal.

Likewise, Minister Singh also informed the Indian upper house that NRB and the RBI have held discussion in connection with the Specified Bank Notes.

He, however, refrained from commenting on exchanging the banned Specified Bank Notes.

India has already exchanged banned notes with Bhutan but the demonetised Indian currency in Nepal are yet to be exchanged even two years after the Indian government banned the notes despite India’s commitment to exchange the Specified Bank Notes soon after demonetisation.

Published: 05-01-2019 09:21

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