Scrapped Indian banknotes in Nepal

Indian Fin Min pledges exchange facility

Published On: March 4, 2017 01:10 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 4: Ending long-running uncertainty over the fate of demonetized Indian banknotes that Nepal holds, Indian Minister for Finance and Corporate Affairs, Arun Jaitley, has said that his government would settle the issue after finalizing exchange modality.

Speaking at a press meet in Kathmandu on Friday, Jaitley said exchange facilities will be provided for demonetized Indian banknotes of 1,000 and 500 denominations that 'are being legally held in Nepal'. He also said that the decision would be taken after the technical team of Reserve Bank of India (RBI), which visited Nepal recently, submits its report. 

Jaitley, who is in Kathmandu to attend the Nepal Investment Summit, said that the two countries would soon agree on a modality of exchange. 

Earlier, the technical team of RBI, which arrived in Kathmandu on Tuesday, had held discussions on management of demonetized Indian banknotes that Nepali bank and financial institutions (BFIs) and general public possess.

The RBI team had also held consultations with representatives of Standard Chartered Bank Nepal Ltd, Rastriya Banijya Bank Ltd, Nepal SBI Bank Ltd, Everest Bank Ltd and NIC Asia Bank Ltd to understand how the exchange facility would work at the operational level.

According to Nepal Rastra Bank (NRB) officials, the team seemed to be positive toward providing exchange facility while they were also concerned over the possibility of Indian nationals, who hold black money, misusing the facility provided to Nepal. 

Nepal has already proposed a modality for providing exchange facility that includes how bank and financial institutions would identify the clients and the banknotes they bring to exchange, know-your-customer process, maximum amount a person can exchange and disclosure, among other issues. 

Minister Jaitley also said that India was committed to support Nepal in growth aspirations for growth.

He also said that India would work to link Nepal to the Indian economy by establishing connectivity in the areas of transmission lines, transportation infrastructures and railway line extensions.

Jaitley said that the BBIN (Bangladesh, Bhutan, India and Nepal) Initiative has started working in those areas for achieving regional prosperity. He also expressed hope that Foreign Direct Investment from India would increase in Nepal in the coming days as Nepal has been improving environment for investment.

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