The NRB team led by its governor, Deependra Bahadur Kshetry, 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 in the order. According to an official at the central bank, Kshetry told Limbu on Tuesday that the bank had made the decision in order to deal with the deepening crisis brought about by the shortage of notes with high denominations.
"It was a pre-emptive step taken to avoid possible future legal complications; we also wanted to take the anti-graft watchdog body into our confidence,” said the high-ranking official. During the meeting, the chief commissioner of the CIAA asked the NRB bosses to abide by all the rules and regulations when implementing the decision to increase the note-printing order. "The important thing is that we were able to convince the CIAA about the gravity of the situation," said the official.
The NRB is planning to raise the number of units mentioned in the existing order--which calls for the printing of 40 million units of 500-rupee notes--to 100 million units. 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.
"A French company that bagged the order to print the 100 million units of 500-rupee notes will supply the notes by the end of July, and that shipment will be enough to meet the higher demand that will occur during the festival season," said the official. During Dashain and Tihar, there is an extremely high demand for high-denomination notes.
The central bank has also placed an order for 100 million units of the 1000-rupee notes. But that consignment will be arriving only on January 10, 2010.
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