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Big jolt to Nepal as RBI refuses to change old notes

Nepal Rastra Bank-NRB Governor Chiranjibi Nepal

New Delhi: When demonitisation is having surreal impacts in India how can the neighbor Nepal be far behind. Yes, after the Himalayan country asked India to do something about the horde of cash of about thousands of crores lying in the form of old denomination of Rs. 500 and Rs. 1000 RBI on Tuesday said a no to the exchange.

The central bank wrote a letter to Nepal’s Rastra Bank saying that it will not change the cash until a high level talks initiates.

Sources said, a total of 3.5 million of Rs. 500 and Rs. 1000 notes in banks and Rs. 10,000 crore are lying in Nepalese market which pose threat to country’s economy ever since the denomination of those types of notes in India since both the countries have a great deal of exchange of currency illegally or through business routes and tourism.

The higher denomination Indian currency is in circulation in the neighboring country as people are allowed to carry up to Rs. 25,000 to Nepal since last two years. Earlier only Rs. 100 notes were allowed to carry.

Nepal’s Rastra Bank Governor Dr. Chiranjivi Nepal has spoken to India’s RBI Governor Urjit Patel to sort out a way for Nepali citizens to exchange such notes up to a certain limit the way it has been done in India.

The RBI has clarified that since it is not solely under its jurisdiction it has conveyed the message for the perusal of the Finance Ministry.

Nepal has asked for a government ministerial level talk to sort out the issue.

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