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Troubled With Rs 950 Crore Demonetised Notes, Nepal PM to Press India for Swap

A senior government official, with direct knowledge of the RBI's views, said the central bank was unable to exchange the old currency notes in Nepal or any other country because there was no such provision made in the rules that the government issued at the time of demonetisation.

Reuters

Updated:April 4, 2018, 7:43 PM IST
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Troubled With Rs 950 Crore Demonetised Notes, Nepal PM to Press India for Swap
KP Oli will meet PM Modi and President Ram Nath Kovind and other officials during the visit starting on Friday. (File photo)
Kathmandu: Nepalese Prime Minister KP Sharma Oli will press India to exchange millions of dollars held in Nepal in demonetised Rs 500 and Rs 1000 bank notes, during a visit this week.

Governments of the two countries are yet to agree on how to exchange the old bank notes, which are estimated to be worth $146 million or Rs 950 crore. These notes were held by individuals and informal sectors when Prime Minister Narenda Modi made the announcement in 2016.

Demonetisation had caught countries such as Nepal and Bhutan, where the Indian currency is widely used, off-guard.

“The Indian demonetisation has hurt Nepali nationals. I will raise this in my meetings with Indian leaders and request them to resolve the issue,” Oli told the Nepal parliament late on Tuesday.

India is Nepal's largest trade partner and the supplier of the bulk of consumer goods. Rupee is widely used by businesses and individuals who keep their savings at homes in Indian bank notes.

Oli will meet PM Modi and President Ram Nath Kovind and other officials during the visit starting on Friday.

Central Nepal Rastra Bank (NRB) officials said the Reserve Bank of India (RBI) verbally agreed to allow every Nepalese national to exchange up to Rs 4,500 worth of demonetised notes in a meeting in March last year.

"But nothing has been communicated to us formally so far," NRB Deputy Governor Chinta Mani Shivakoti told Reuters.

A senior Indian government official, with direct knowledge of the RBI's views, said the central bank was unable to exchange the old currency notes in Nepal or any other country because there was no such provision made in the rules that the government issued at the time of demonetisation.

"Only the federal government can take a decision in this regard now," the official said.

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| Edited by: Sanchari Chatterjee
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