Kathmandu, December 9
Nepal’s tax investigation department says it has over NRs 8.9 million in demonitised Indian currency notes it impounded over the last few years, and it has no clue what to do with it.
This comes as New Delhi continues to remain silent on the fate of demonitised currency notes of Rs 500 and Rs 1,000, and people with Indian money grow restless as the December 30 deadline comes closer.
Under prevailing legal provisions, Nepalis are allowed to bring in up to INR 25,000 (in Indian currency) when they cross the border from India. Those who carry more than the stipulated amount are detained by the tax investigation department, and their money is impounded.
The department has in its vault Indian currency, that too of the demonitised denominations, worth over NRs 8.9 million ( 1 INR = 1.6 NRs). “We have around NRs 8.95 million in demonitised notes,” says Director General of the department Nirmal Hari Adhikari.
“We have written to the finance ministry as well as the central bank. But they have not responded,” added Adhikari. “We had around Rs 62 million in Rs 500 and Rs 1,000 notes even before the demonitisation announcement. Another 20 million was added in the days following the announcement.”
He added that the notes were impounded not just from Nepali nationals, but also from Indians crossing the border into Nepal. Over 10 people have been detained after the announcement on charge of carrying cash in excess of Rs 25,000.
On November 8, India’s Prime Minister Narendra Modi, in an unscheduled live televised address at 20:15, declared that use of all Rs 500 and Rs 1,000 banknotes of the ‘Mahatma Gandhi Series’ would be invalid from midnight of the same day and announced the issuance of new Rs 500 and Rs 2,000 bank notes of the ‘Mahatma Gandhi New Series’ in exchange for the old banknotes. The government claimed that demonetisation was an effort to stop counterfeiting of the current banknotes allegedly used for funding terrorism, as well as a crack down on black money in the country.
The move was described as an effort to reduce corruption, the use of drugs, and smuggling.
Adhikari says he does not know what will happen with the notes the department has. He also does not know what procedure to follow if and when the court orders the notes to be returned to defendants in one or more cases.
Meanwhile, the Indian government’s inter-ministerial taskforce formed to facilitate exchange of notes for diplomatic missions and neighbouring countries has already submitted its report, but the centre is yet to take any action.
Official sources believe that the Indian government wants to give as less time as possible for neighbouring countries to exchange the notes as it fears that ‘black money’ (unaccounted money) could find its way into India from across the border.
The Indian government also does not want terrorist groups, against whom the move was directed, to benefit from the exchange facility provided to citizens of Nepal and Bhutan.
A Nepal Rastra Bank source told OnlineKhabar, “It is unlikely that the Indian government would allow exchange facilities for currency worth over Rs 25,000 per person as under prevailing rules Nepali nationals could carry up to INR 25,000 while coming home from India.”
Nepal’s central bank, around 20 days ago, formed a committee to coordinate on the issue with the Indian side. The only thing the committee, chaired by Deputy Governor Chintamani Shiwakoti, is doing right now is to wait for the Reserve Bank of India to contact them.
This looks possible only when New Delhi implements the inter-ministerial taskforce’s report, details of which are still under the wraps. An official with the central bank told OnlineKhabar that the Indian government is less concerned about the implications of demonitisation on the neighbouring countries. This is a secondary issue for them as their focus is on mitigating the problems brought about by the announcement, he said.