KATHMANDU, May 21: Nepal Rastra Bank (NRB) has taken strict measures for exchanging burnt paper notes, making it mandatory for individuals to obtain approval from the Nepal Police and local bodies to exchange such currency in bulk.
With the NRB’s new decision, any individual looking forward to exchanging the paper notes that are torn, mutilated, burnt or have a smoky odor can not easily do so. According to NRB Spokesperson Guru Prasad Paudel, the individuals must produce satisfactory clarification in order to get the suspicious paper notes exchanged. He added that the rule is not applicable for exchanging torn or burnt notes in small quantities.
Citing the possibility that many people who gathered large amounts of paper notes that were burnt during the Gen Z protests could bring them for exchange at banks and financial institutions (BFIs), the central bank has taken stern measures in this regard.
NRB set to distribute new currency notes for Dashain festival
During the September 8-9 Gen Z protests, demonstrators reportedly looted or burned bundles of currency notes worth millions at the homes of Nepali Congress (NC) President and former Prime Minister Sher Bahadur Deuba; Ganga Dahal, daughter of the erstwhile CPN (Maoist Center) Chairman and former Prime Minister Pushpa Kamal Dahal; and former Minister for Energy, Water Resources and Irrigation Deepak Khadka. Deuba’s spouse, Arzu Rana Deuba, had also served as foreign minister in the previous KP Oli-led government, while Ganga currently heads former Prime Minister Dahal’s personal secretariat.
Apart from the high profile political leaders, cash belonging to several private organizations was also burned during the violence that followed the Gen Z protests. Earlier in September end, NRB had instructed the BFIs not to reimburse burnt or smoky paper currency.
The NRB’s move comes in the wake of the government launching stern measures against money laundering incidents. Under the Department of Money Laundering Investigation (DMLI) Act, any cash holdings exceeding one million rupees are subject to scrutiny, and individuals must disclose legitimate sources of income. Failure to do so constitutes a punishable offense under the Revenue Leakage (Investigation and Control) Act, 1995.
According to the NRB Act 2002, the central bank is not obliged to accept any note of which more than 50 percent of its surface has been torn, defaced, or mutilated, nor any counterfeit note. In addition, holders of damaged paper notes must comply with specific guidelines prescribed by the NRB.
“No individual may destroy or dispose of damaged banknotes, nor misuse, withhold, or distribute such notes for personal gain. Notes deemed unfit for circulation due to wear, illegibility, or other reasons must be properly disposed of as required by law,” the NRB regulations state.
