NRB board okays note-printing order

KATHMANDU, May 1: Responding to the increasing shortage of bank notes of higher denominations, the Nepal Rastra Bank board has authorized the management of the central bank to raise the volume of the existing printing order for 500-rupee notes to 100 million units. [break]



A central bank source informed myrepublica.com that a meeting was held on Thursday, during which members of the management expressed dissatisfaction over the failure of the bank management to forecast future demand for the notes and to take timely steps to forestall shortage. “The meeting concluded that there was an inability on the part of the bank to meet the demand for these notes because the existing stock and the printing order that has been placed so far are not even enough to meet even normal demand,” said the official.



Besides the scarcity of 500-rupee notes, there has also been a dip in the number of 1000-rupee notes being circulated around the country. Notes with these denominations have become scarce because there have recently been unusually high and unexpected withdrawals from the banking system, said the official.



According to the new authorization, a French company that had bagged the order to print the 60 million units of 500-rupee- notes will now get an offer from the NRB to print an additional 40 million units, said the official.



The shipment of notes from the earlier order are expected to arrive in the capital by the end of July. “That lot should be enough to meet the higher demand that is bound to occur during the festival season of Dashain and Tihar,” said the official.



Apart from the 500-rupees-notes, the central bank has also placed an order for 100 million units of 1000-rupee notes. But that consignment will be arriving only on January 10, 2010.



Recently, in order to avoid possible future allegations of corruption, the top officials at Nepal Rastra Bank (NRB) had apprised the Commission for the Investigation of Abuse of Authority (CIAA) of their plan to increase by more than twofold the volume of their existing order for printing 500-rupee notes.



An NRB team, led by its governor, Deependra Bahadur Kshetry, had explained to Lalit Bahadur Limbu, the acting chief commissioner of the CIAA, why the bank needed to increase the number of notes to be printed.

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