Banned Indian Banknotes: NRB Official Hopes Oli Visit Resolves Issue

Thousands of Nepal’s saddled with banned Indian notes are anxious to exchange them with valid legal tender.

April 1, 2018, 10:16 a.m.

Nepal Rastra Bank (NRB) Deputy Governor Chintamani Shiwakoti on Saturday expressed optimism that Prime Minister KP Sharma Oli’s India state visit would resolve the 17-month long issue of exchanging banned Indian currency with valid legal tender.

Many Nepalis wonder whether the bilateral talks during the prime minister’s visit would succeed in bringing relief to Nepalis possessing scrapped IRs 500 and IRs 1,000 Indian currency notes.

PM Oli and his high-level delegation start their three-day India visit on April 6.

NRB has reiterated the issue of invalid Indian notes to Prime Minister Oli and Finance Minister Dr Yubaraj Khatiwada, Shiwakoti said.

NRB has repeatedly informed the Reserve Bank of India (RBI) to exchange banned old notes that Nepalis possess, but to no avail. The Indian government had earlier assured Nepal to exchange the invalid notes. The issue remains unresolved for almost 17 months.

NRB and RBI senior officials have held many rounds of talks as well as prepared reports on the demonetization of IRs 500 and IRs 1,000 notes. The NRB has demanded India exchange new currency notes up to IRs 25,000 per person.

Sources here with knowledge about demonetized Indian currency say the probability of prioritizing the issue of exchanging invalid Indian currency during Oli’s visit is slim. Indian officials remain silent on this issue, sources add.

According to The Kathmandu Post, thousands of Nepal’s saddled with banned Indian notes are anxious to exchange them with valid legal tender.

New Delhi-based Nepali tourism businessperson Prakash Pantha said, “Both governments should find solution to the invalid currency exchange issue as soon as possible.”

On November 8, 2016, giving just a few hours notice in a speech broadcast on national television, Prime Minister Narendra Modi-led Indian government demonetized IRs500 and IRs1,000 currency notes.

The Indian government announced December 30, 2016 as the last date to exchange the banned notes. Chaos all over India, long queues at banks and public outrage at the forced financial difficulty, compelled the government to extend the deadline up to March 2017.

The note ban had severely affected businesspersons, service class people in Nepal and those who travelled often to India.

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