At a time when almost every citizen settled in abroad or local is going through the problem of demonetization of India’s higher currency notes of INR 500 and INR 1000 as well as facing troubles exchanging such notes, the Central Bank of Nepal has come ahead and refused to accept the India’s new currency note, terming them “illegal and unauthorised.”
These new notes of INR 500 and INR 2000, which were issued by the Reserve Bank of India (RBI) soon after old INR 500 and INR 1000 denomination notes were withdrawn, won’t be legal in Nepal until RBI issues a new notification under the FEMA (Foreign Exchange Management Act), said Nepal Rastra Bank.
Ramu Poudel, chief of the Nepal Rastra Bank’s eastern region, told members of the business community in Biratnagar that the new Indian currency note of INR 500 and INR 2000 will be considered as “illegal” and can’t be accepted until new arrangements of exchange are determined by the Indian side.
“As of now, our understanding with the Reserve Bank of India is that a Nepali citizen can hold up to Indian Rs 25,000 (in the) old Rs 500 and Rs 1,000 notes. Even the fate of those old notes is uncertain, how can these new Indian notes coming into the market be considered as legal?” Poudel said.
With information available, Nepal and India are yet to come at an agreement on facilities for the exchange of the withdrawn currency held by citizens of Nepal. Poudel said both the central banks are working together to address this issue but no way out has been found as yet.
The FEMA notification let foreign countries or nationals to possess certain amount of Indian notes. At present, India has allowed Nepalese citizens to hold Indian currency up to INR 25,000. Read more Business News.