How were your talks with NRB ?
We had very constructive talks on a number of agendas of mutual concerns and cooperation. Most of these agendas were continued from the past. We had meaningful talks on currency remittances and circulation of clean IC notes. This visit was beneficial to me as it also gave me an opportunity to better understand NRB, its structure and working style.
Did you reach any specific understanding on any issue?
Yes, we have converged at improving currency remittance services. A large number of Nepalis work in India and they remit their income to their family back home. We talked on how we could facilitate those people and have reached an understanding. Apart from that, we focused on how we could ensure enough clean IC in the market. As in the past, NRB is positive towards ensuring availability of genuine IC notes.
You said an understanding has been reached on currency remittances. What is it? Have you agreed on new arrangements to facilitate money transfer?
No, there is no new arrangement. But we have agreed to put in collective efforts to improve formal money transfer so that people could transfer their income efficiently and at low cost. For this, we have committed to expand and deepen the already existing money transfer services. While talking on remittances, we also remained mindful of illegal activities that can surface in the process and have agreed to control them as well. The idea is to make sure that people´s hard-earned money is not lost or misused by others.
Did you identify new areas for future cooperation?
NRB and RBI are engaged in number of areas of mutual cooperation. Some of these are of bilateral nature while most are covered under SAARC. So, during this visit we did not talk on new areas. Rather, we focused on how we can improve our understanding of each other and how we can deepen cooperation in the existing areas of cooperation.
There is a growing concern in Nepal that politicians, bureaucrats and private individuals who amassed huge money through illegal means have parked their earnings in India, mainly investing in fixed assets. Is RBI ready to help NRB if it formally requests for support to trace and control such investments?
We will definitely extend all possible support to NRB to check the flow of illegal money. It is our duty to control illegal activity. Government of India remains committed to control flow of illegal money to India from any country. If we can be a part of such control drive of NRB, we will be more than happy. RBI will readily support to control such money, if the two governments entered in an understanding or we received a formal request from NRB.
SAARC has long talked about currency union (use of single currency in the region). Has RBI done any exercise to ascertain whether that is possible?
We have not done any unilateral exercises on it. But what is for sure is that a single currency cannot be put in place just like that. Countries in South Asia would need to meet basic criteria. The economies must be totally integrated. Experience of the European Union has shown countries must also attain full fiscal integration if they are to succeed on single currency. South Asia, so far, remains distant in meeting these criteria. We still need to traverse a lot for single currency.
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