The 50-day deadline to exchange Indian currency notes of 500 and 1,000 is over, but the fate of those currency notes in Nepal remains uncertain.
Even after telephone conversations between Prime Minister Pushpa Kamal Dahal and his Indian counterpart Narendra Modi, the Reserve Bank of India (RBI) is yet to inform the Nepal Rastra Bank (NRB) about how these banned currency notes can be exchanged, if at all.
When Modi announced demonetisation in November aiming to weed out black money and counterfeit currency from the Indian economy, the NRB had more than INR 33 million in high denomination 500 and 1,000. It is believed that Nepali businessmen also had a big amount of INR 500 and 100.
The end of the 50-day deadline in India has set off fears in Nepal that the banned Indian currency notes possessed by the NRB and Nepali nationals will remain worthless.
However, the NRB is hopeful that it will still reach an understanding with the RBI to exchange the banned currency In the hands of Nepalis. The NRB’s Executive Director Bishma Raj Dhungana has said that India will hopefully make special arrangements for Nepal and Bhutan.
Finance Minister Krishna Bahadur Mahara and the NRB governor Chiranjibi Nepal have held several rounds of talks with their Indian counterparts. The NRB has also written a letter to the RBI, but has not received a reply yet.
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