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Dahal asks Modi for IC exchange facility

Prime Minister Pushpa Kamal Dahal has made a phone call to Indian Prime Minister Narendra Modi, requesting him to provide exchange facility for the demonetized Indian currencies in circulation in Nepal. According to the Prime Minister Dahal's secretariat, the prime ministers of the two countries held phone conversation where Dahal congratulated Modi for his latest move to crack down on black money and counterfeit currency racket.

"Prime Minister Dahal held phone conversation with Indian Prime Minister Modi today for nearly five minutes. The Indian prime minister has given assurance to our prime minister that he would address the problem that Nepal has been facing," Govinda Acharya, press advisor to Prime Minister Dahal, told Republica. 

Prime Minister Dahal has took the initiative to address the problem of exchange of demonetized Indian currencies after attempts by the Nepal Rastra Bank (NRB) did not yield any results. Earlier NRB officials had said that the problem is not going to be resolved solely through the central bank's correspondence with the Reserve Bank of India.

"While NRB has already sent a letter requesting its Indian counterpart for the swap, we have not received any assurance so far from the central bank there that it would accept the high-denomination currency that we have in our possession. Since the ban was issued by the government of India, it seems RBI cannot address the issue on its own. So, it forwarded our letter to their finance ministry there," a high level official at NRB, who did not wish to be named, told Republica.

NRB officials say that the Nepal government should initiate a direct dialogue with the Indian government at the political and diplomatic level to find a way out of the problem.
"It seems that the Indian government is looking for a commitment from our side that the demonetized banknotes returned from Nepal is not black money. The government needs to assuage the concerns of India through high level talks," he said.

"This is not going to happen from the level of the central banks. The prime minister should now talk with the Indian prime minister to resolve this problem," he added. Earlier last Friday, NRB had dispatched a letter to the RBI requesting it to exchange the demonetized Indian banknotes from Nepal.  According to officials of NRB, the RBI officials have asked about the total sum of Rs 1,000 and 500 Indian banknotes that Nepal could return to them. 

However, NRB officials could not provide the total figure for such banknotes in Nepal as they do not have any idea about the amount of Indian banknotes that the public possess. There is nearly Rs 30 million worth of Indian banknotes of 1,000 and 500 denominations, going by the reportings of banks, financial institutions and money changers, according to NRB.

"We do not have accurate figures about how much Indian currency we and the public have, and this raises suspicions among Indian officials that black money could make it back to India through Nepal if the exchange facility is provided to Nepalis the same way it is providing to its own citizens," said another NRB official.

Claiming that the Nepal government was taking up the issue at a diplomatic level, Minister for Foreign Affairs Prakash Sharan Mahat told Republica that India was concerned about the risk of black money getting back into India again through Nepal. 

November 15, 2016 05:37 A.M.


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