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Business suffers due to ban on higher denomination Indian currency in Nepal

Source : ANI
Last Updated: Tue, Dec 04, 2012 08:50 hrs

The imposition of a blanket ban by Nepal on the free circulation of Indian currency of higher denominations like rupees 500 and 1000 worries traders, whose businesses have begun to witness a downfall.

This decision has been taken to prevent cross-border smuggling of narcotics and firearms.

According to media reports, the higher denomination currency notes are used in the smuggling of these goods across the border. Nonetheless, notes of rupees 100 have not been banned.

The guidelines of the Reserve Bank of India and Foreign Exchange Management Act have not restricted the free circulation of higher denominations of Indian currency. But, the ban has been enforced keeping in view the vulnerability of the Indo-Nepal border.

Bhola Yadav, a trader, said that the ban has been imposed, since there has been an entry of fake Indian currency into Nepal.

"The ban imposed on notes of 500 ($9.10713) and 1,000 rupees in Nepal is because there a lot of fake Indian currency notes, which have entered the country and that is why a ban has been imposed," he said, while speaking to a reporter on Monday (December 03) in Belahiya, near the Indo-Nepal border.

The ban was necessitated after a huge consignment of fake currency notes was seized near the border.

In order to prevent such incidents, security personnel have been posted at the border to frisk tourists.

Srichand Gupta, President, India- Nepal Friendship Society and Trade Organisation, Nepal, said that trade has been adversely affected between the two nations.

He added that if the ban was lifted, then it could provide impetus to businesses of both nations.

"The ban imposed on Indian currency notes of 500 and 1000 rupees in Nepal has affected business between the two nations. Initially, people would come to Nepal with these denominations and carry out their trade easily. Now, instead of keeping one 1,000 rupee note, we have 10 notes of 100 rupees and it is the same for 500 rupees. Earlier, we could carry out our transactions with one note. If the ban is lifted, then the business will receive impetus again," he said.

As per an agreement between the two countries, the Nepal government has banned use of Indian currency notes of rupees 1,000 and rupees 500 denominations for more than a decade to check smuggling and pushing of counterfeit Indian currency into Nepal. (ANI)




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