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Two Months After Demonetisation, Nepal Still Awaits Help From India


First published: January 18, 2017, 7:49 AM IST | Updated: 9 mins ago

The new 500 and 2000 rupee notes.

New Delhi: Nepal’s Foreign Minister Prakash Sharan Mahat on Tuesday said that Nepalese people have been suffering ever since demonetisation was announced.

Speaking to CNN-News18 Mahat said, “Of course people in Nepal are feeling the pinch. They are holding legally earned Indian currency which they cannot use for businesses or anything else and they would like to get it exchanged”.

Indian currency is widely accepted in Nepal and post-demonetisation Nepali citizens have been left in the lurch with old 500 and 1000 rupee notes which are no longer legal tender. In addition to that, India and Nepal share a porous border as a result of which many Nepalese residents regularly travel to India for medical care, education and business.

Mahat confirmed that he had taken up the matter with Finance Minister Arun Jaitley whom he met on Tuesday. When asked whether this had become a point of discord between the two neighbors he said, “It is not a point of discord but we want the problem to be resolved at the earliest otherwise people will not be able to use their money”.

Nepal wants the Reserve Bank of India to exchange the entire demonetised currency held by Nepal’s Central Bank. In his meetings Mahat is believed to have told the Indian government that Nepal’s Central Bank can ask people to deposit old notes and once that is done the RBI can exchange the total demonetised currency held with it. The new notes can then be distributed among depositors.

Mahat also said that it was sad that the SAARC summit has been held up because of tension between India and Pakistan. He said, “We hope relations between India and Nepal will normalize soon so that SAARC can happen. We don’t want the process to die”.

Nepal is the chair for SAARC and following the Uri attacks India and several other member states had written to it expressing their inability to attend this year’s SAARC summit which was supposed to be held in Islamabad.