Stay tuned with CashEssentials news ! - beyond payments
By subscribing, you accept our Privacy Policy.

Demonetised Indian rupees on borrowed time in Nepal

Categories : Cash is universal
April 24, 2017
Tags : Asia, Cash, Cash circulation policies, Central Bank
The Reserve Bank of India is conducting discussions with the Nepal Rastra Bank to exchange old Indian notes held by Nepalese supposedly already worthless since December 2016.
Communication Team / Equipo de Comunicación
The repercussions from India’s demonetisation of the IRs 1,000 and 500 at the end of 2016 were felt even beyond its borders. 
Indeed, Indian rupees are not only used in India, but also in Nepal, Bhutan and Zimbabwe. The old notes are also considered worthless in those countries, but many of them are still in circulation. As a result, the Reserve Bank of India (RBI) agreed to conduct discussions with the Nepal Rastra Bank (NRB) and offered to exchange the old Indian notes held by Nepalese people up to a limit of IRs 4,500. The team representing the Nepalese government had until March 31 to accept the offer but decided to turn it down. The reason for this is that Nepal asked India to provide a facilitated exchange for a value five times higher than India’s initial proposal (IRs 25,000), which is also equal to the legal amount people are authorised to carry in Nepal. 
According to the NRB, demonetised Indian banknotes worth IRs 33.6 million are stored in the Nepalese banking system. This is excluding the notes held by traders, families and migrant workers. Bhisma Raj Dhungana, Executive Director of the NRB, remains positive and believes that India might come up with a new arrangement but if things do not go as planned, many Nepalese households and businesses could be hardly hit. 
To read the original article, please click here.