Originally posted by the Voice of America.
Voice of America content is produced by the Voice of America,
a United States federal government-sponsored entity, and is in
the public domain.


Nepalis, Saddled With Banned Indian Rupee Notes, Risk Losing Savings

by Reuters

   KATHMANDU --

   Nepalis stand to lose millions of dollars held in high-value Indian
   bank notes that India banned last year and has yet to exchange, a
   Nepali central bank official said on Tuesday.

   Indian Prime Minister Narendra Modi in November banned 500 rupee
   ($7.77) and 1,000 rupee bank notes as part of a drive against
   unaccounted wealth in India that has also hit Nepal where Indian rupees
   are widely used.

   People holding the notes in India were given a little less than two
   months to exchange them at banks.

   In March, officials from the Reserve Bank of India (RBI) visited Nepal
   and promised to allow every Nepali citizen to exchange 4,500 Indian
   rupees ($70) worth of the old notes for new ones.

   "That was only a verbal assurance but no formal decision from India has
   come to us," said Chinta Mani Shivakoti, a deputy governor of the
   central Nepal Rastra Bank.

   "Even if this amount was exchanged, individuals holding more than 4,500
   Indian rupees risk losing the excess," Shivakoti said.

   Nepal depends heavily on funds from workers in India, who sent home
   $640 million in 2016, or about 3 percent of its gross domestic product.

   The Indian central bank declined to comment. An Indian Finance Ministry
   spokesman also declined to comment, saying it was a central bank
   matter.

   India fears that if it agrees to Nepal's demand to allow Nepalis to
   exchange unlimited amounts, a large number of Indians may launder their
   ill-gotten old notes through Nepal.

   Shivakoti said Nepal's banks hold 78.5 million Indian rupees worth of
   the old notes, while business officials estimate that up to 10 billion
   in old Indian rupees ($155 million) may be held by individuals in
   Nepal's informal sector.

   Another NRB official, Bhisma Raj Dhungana, said the delay in resolving
   the issue was causing concern.

   "India should have allowed the exchange facility much earlier,"
   Dhungana said.

   Ordinary Nepalis say they have been hit badly by the delay.

   "My savings are worth no more than waste papers. I can't do anything
   about it," said Saila Thakuri, who has 8,000 Indian rupees in old notes
   sent by his son who works in a restaurant in New Delhi.