Nepal’s central bank has INR 70 million as it awaits India to exchange them

File: Indian currencies of Rs 500 and Rs 1,000 denominations banned in 2016
File: Indian currencies of Rs 500 and Rs 1,000 denominations banned in 2016

Kathmandu, February 28

On November 8, 2016, the Indian government in its major demonetisation move banned 500- and 1,000-rupee notes, saying it would help the government control black money transactions.

Five and a half years on, the problem is still troubling Nepal as its central bank has a stock of INR 70 million in those denominations waiting to be exchanged.

Whereas the government of Nepal has also not made serious efforts to solve the issue, the Indian government is also not interested.

Officials at Nepal’s central bank, Nepal Rastra Bank, says it has communicated with its Indian counterpart several times, but the Reserve Bank of India did not make any response.

On the other hand, the central bank leadership is also not keen on solving the problem. Although former governor Chiranjeebi Nepal, and deputies Chintamani Shiwakoti and Shiva Raj Shrestha had taken some initiatives, the current leadership looks passive.

“Now, we have already given up our hopes. I don’t think there is any possibility that these notes will be exchanged,” an official says.

During the demonetisation move, Nepal reportedly had 500- and 1,000-rupee notes worth Rs 78.5 million in total. It means the country became able to exchange only around Rs 8.5 million.

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Acharya is a business correspondent for Onlinekhabar.

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