After experiencing the crunch some weeks ago, Nepal Rastra Bank (NRB), the central bank of the country, had asked the printers to immediately dispatch 100 million units of 1,000-rupee notes and 40 million units of 500-rupee notes. "But they have said it will take four to five months to print new ones," Deependra Bahadur Kshetry, governor of NRB, said during the inauguration ceremony of a finance company in Pokhara.
Domestic market had suddenly witnessed scarcity of higher denomination bank notes soon after the government announced Voluntary Disclosure of Income Source (VDIS). The scheme was introduced in an attempt to tax those who made money but were out of the tax net. Although the effort made by the government to widen the tax net was appreciated by many, they were equally suspicious of the move made by the Maoist government. They feared the Maoists may later use it as a basis to extort money from them.
The governor blamed "high net worth individuals and companies as reasons behind the scarcity of bank notes". "They must have withdrawn the money their money from the bank to evade the taxes," Governor Kshetry claimed. "This is what is causing the shortage." He also appealed to the high net worth individuals to fall into the tax net so as to avoid government action.
The governor also feared the declining remittance income growth rate may pose serious threat to the country´s economy. In the (Nepali) month of Mangsir (mid-November to mid-December 2008) remittance income growth rate had stood at 67 percent. However, this growth rate declined to 65 percent in Poush (mid-December 2008 to mid-January 2009) and 57 percent in Falgun (mid-February to mid-March 2009), Kshetry said.
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