Old notes to remain in circulation for two more years

KATHMANDU, APR 01 -

Currency notes bearing portraits of former kings will remain in circulation for an additional two years, with a Cabinet committee deciding to allow the Nepal Rastra Bank (NRB) to pull all such notes out of circulation within the period.

According to the central bank, there are estimated Rs 2 billion worth of such banknotes currently in circulation. Two senior NRB officials confirmed that they were informed about the Cabinet committee’s decision, but they are ‘yet to receive the official letter’.

In February 2007, the government had decided to keep notes bearing portraits of kings out of circulation by 2010, following the restoration of democracy after the people’s movement-II. And as per the government’s decision, the central bank asked banks and financial institutions (BFIs) not to accept such notes after March 14, 2011.

However, plan could not materialise as is created a chaos across the country with people thronging BFIs to get their old notes exchanged. The Commission for Investigation of Abuse of Authority also intervened in the matter, which forced the NRB to roll back its decision after three days.

Now, as the Cabinet committee decision has given two more

years to pull the old notes out of circulation, central bank officials believe that the job will be done within the time. “As NRB has not been circulating notes bearing kings’ images after it receives them from BFIs, almost all the notes will be out of circulation by the time,” said NRB Deputy Governor Gopal Prasad Kafle.

According to NRB officials, a huge amount of clean notes bearing kings’ images are stocked at NRB, which are still fit for circulation. “Given the government’s policy of removing such notes from the market, we cannot resend them to the market,” said another official.

This means the central bank has to bear additional cost for printing new notes to replace the old notes. NRB generally destroys notes only after they get too old to use.

Source:  Kantipur