NEPAL WANTS HIGH-DENOMINATION INDIAN BANKNOTES
The E-Sylum (1/13/2019)
From physics we know that for every action there is an equal and opposite reaction. The law governs people, too. While there have been many voices calling for the elimination of high-denomination banknotes to combat the black market economy, there are other voices defending their use. In this article, Nepal is requesting to use high-denomination Indian banknotes. -Editor
The Nepalese government has asked the Reserve Bank of India (RBI) to make all Indian bills, including Rs 200, Rs 500 and Rs 2,000, legal tender in the Himalayan state, where the Indian rupee is widely used.
India has been reluctant to allow high-denomination currency notes to circulate in Nepal, where currently only the Rs 100 note enjoys official acceptance, as this could lead to people stashing illegal cash and fuel the flow of fake banknotes.
The Indian rupee accounts for an estimated 25 per cent of the total money in circulation in Nepal, with the currency also used for the bulk of bilateral trade between the two countries. India is the largest trading partner of Nepal, a landlocked country located between India and China.
Also, the thousands of Indian tourists who visit Nepal every year have shown a preference to transact in the Indian rupee.
However, last month, the Nepalese government banned the circulation of Rs 200, Rs 500 and Rs 2,000 bills, which were introduced after Indiaâs November 2016 demonetisation move but are yet to be notified by the RBI for use in Nepal.
Besides Nepal, the Indian currency is also widely used in Bhutan, with people allowed to carry Rs 25,000 in Indian currency to the two countries.
To read the complete article, see:
Why Nepal wants high-denomination Indian bills as legal tender in the country (https://theprint.in/economy/why-nepal-wants-high-denomination-indian-bills-as-legal-tender-in-the-country/175300/)