Nepal will soon be able to exchange old Indian scrapped notes: Jaitley

Kathmandu: Finance Minister Arun Jaitley, on Friday announced that Nepal would soon get exchange facilities for the demonetised high-value Indian currency notes to ease difficulties faced by Nepalese citizens.

Jaitley, who was here on a two-day visit to attend the Nepal Investment Summit, said necessary steps have been taken to facilitate the exchange of demonetised currency as per Nepal's request.

He said Nepal Rastra Bank (NRB) and the Reserve Bank of India (RBI) would set a modality of exchange soon and settle the related issues.

Indian currency is widely used in Nepal for day-to-day transactions, especially in the border areas.

Also, Nepalese citizens working in India send remittances to their families in Nepal in higher denomination notes. Nepal, a landlocked country, depends on India for trade and supplies.

According to the NRB, nearly 33.6 million Indian rupees in Rs 1,000 and Rs 500 banknotes are currently in the Nepali banking channel. However, it is not known how much such banknotes are in the hands of Nepali traders, families of migrant workers and the general public.

Earlier, Nepal's central bank had assured the RBI that it will introduce strong vetting process for those coming to exchange demonetised Rs 500 and Rs 1,000 notes in the country and ensure that the system is not misused.

A two-member RBI team had arrived in Kathmandu on Tuesday to hold talks on management of demonetised Indian notes possessed by Nepali banks and financial institutions as well as the public.

The team held discussions with the officials of the NRB and representatives of commercial banks on a range of technical issues on providing exchange facility for demonetised Rs 500 and Rs 1,000 Indian currency notes in Nepal.

The Indian government on November 8 banned high-value currency notes as part of its efforts to combat corruption.