Nepal asks banks to stop transactions in Rs500, Rs1,000 notes
Kathmandu: The Nepal Rashtra Bank (NRB), the country’s central bank, on Wednesday asked banking and other financial institutions in the country to immediately stop transacting in Indian currency notes of Rs500 and Rs1,000 denominations, a day after India demonetised them.
The NRB in a written directive to the financial institutions as well as currency exchange offices said all business transactions in Indian currency notes having the particular denominations should be stopped with immediate effect.
NRB further decided to write to the Reserve Bank of India for the management of the bank notes with higher denominations in Nepal, the Himalayan Times reported.
A limited use of R 500 Indian currency notes was allowed in Nepal in August 2015, after being prohibited since 2002. The ban was imposed after several reports of counterfeiting.
India’s ban on the currency notes on Tuesday is likely to trouble traders in the border areas, who relied heavily on Indian currency because of their businesses and imports from India through the “open borders”.
Indian currency is widely used in Nepal for day-to-day transactions, especially in the border areas. Also, a large number of Nepalese citizens working in India send remittances to their family in Nepal in higher denomination notes. Nepal, a landlocked country, depends on India for trade and supplies. PTI