RBI sets up task force to ease currency exchange in Nepal

The Dollar Business Bureau 

The Reserve Bank of India (RBI) has set up a task force to ease currency exchange facility in Nepal for non-Indians, possessing Rs.500 and Rs.1,000 notes in denominations, after a Nepalese parliamentary panel urged the Indian government to take adequate measures to settle the issue. 

The new task force will come up with necessary modalities to address the problems of currency black-outs, also being faced by the people of Nepal and Bhutan - where the Indian notes were in wide circulation, said Bhisma Raj Dhungana, chief of Foreign Exchange Management Department of the Nepal Rastra Bank (NRB).  

"RBI Governor Urjit Patel has informed his Nepali counterpart [Chiranjibi Nepal] about the formation of the taskforce," Dhungana was quoted as saying by The Kathmandu Post. "I also had conversations with RBI officials today and they have indicated that the issue would be resolved soon."  

Dhungana said the formation of a new taskforce signals that a solution to the currency problem is imminent. "But it is too early to say whether the solution would address the real problem faced by people here. We are in regular communication with the Indian Embassy in Kathmandu and are urging them to come up with a solution soon," he said.

NRB Governor Chiranjibi said he was in regular touch with his RBI counterparts to ease the exchange process.  

Earlier, a Nepalese finance committee had directed the Nepal Rastra Bank (NRB) and the Ministry of Finance to take measures in this regard.  

Nepal’s Premier Prachanda earlier this week called Prime Minister Narendra Modi, seeking an arrangement so that the Nepalese people with high denomination Indian notes could swap with legal Indian currency in their country.  

According to NRB, Indian currency notes with a total value of Rs 33.6 million ((including cash parked at bank vaults, financial institutions and NRB)) in denominations of Rs.500 and Rs.1,000 is in circulation in Nepal's financial system.