Amid concern in Nepal over demonetisation of Rs 500 and Rs 1,000 notes, Indian Embassy officials here held a meeting with Nepali businessmen to assuage their fears, according to a media report.
The Indian government has responded "positively" to the proposal made by the Nepal Rastra Bank (NRB) to provide exchange facility to Nepalis holding banned Indian banknotes of 500 and 1,000 in Nepal, The Kathmandu Post reported.
During an "unofficial meeting" with Nepali businessmen yesterday, Embassy officials were quoted as saying that the Indian government was positive about allowing each Nepali citizen to exchange Rs 500 and Rs 1,000 notes worth up to Rs 25,000 with legal bills here in the country.
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"We are expecting a decision from our government soon," the official said.
"India is cautious about providing exchange facility to citizens of a foreign country, as it fears it could be used as 'a clearing house' to convert counterfeit currency into legal tenders," the businessman was quoted as saying.
"But we tried to convince Indian officials that there was very little chance of Nepal being used for that purpose because the payment is made in Nepali currency, which is of no use in India," he said.
"Also, the Embassy looks convinced with the modality prepared by the central bank," he added.
However, there was no immediate reaction on the issue amd the meeting from the Indian Embassy here.
The NRB was quoted as saying by the daily that the Indian Embassy has not made any official statement in this regard.
"We did not hold any communication with the embassy today," a highly placed source at the NRB said.
"However, Indian officials told us yesterday that they would immediately forward any decision made by the India's central government to us," the source told the daily.
The central bank in its modality forwarded to the Indian government had said it planned to collect recently banned Indian 500 and 1,000 rupee notes from Nepali citizens and send them to the Reserve Bank of India (RBI) for verification before offering equivalent exchange in Nepali currency.
The NRB has clearly stated that it will not provide over-the-counter exchange facility for Nepalis holding banned Indian currency, saying it lacks expertise and technology to identify counterfeit Indian currency.
According to NRB Nepal's financial system holds Indian Rs 33.6 million in the denominations of 500 and 1,000. The amount includes cash kept in the vaults of banks, financial institutions and the central bank.
Nepal last year allowed people to carry Indian Rupees of higher denominations upto Indian Rs 25,000 after years of banning the bank notes.
The Reserve Bank of India had formed a task force to ease currency exchange facility in Nepal for non-Indians who possess the now-defunct notes of 500 and 1,000 denominations.
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