Gaining currency

Pics: Jiyalal Sah

Harindar Mahato of Birganj (pictured, above) was preparing to take his wife to Madhubani in India for medical treatment last week. He had saved up INR 10,000 – all in high denomination 500 and 1,000 notes.

But on 8 November, Indian Prime Minister Narendra Modi made the surprise announcement to ban those notes saying India needed to weed out black money and counterfeit currency. Just like tens of millions of Indian families, Mahato’s hard-earned money suddenly became worthless.

He rushed to the Birganj office of Nepal Rastra Bank the day after the ban, but it had stopped exchanging Indian currency.

Birganj is the corridor for 80 per cent of India-Nepal trade and INR serves as a parallel currency here. India’s demonetisation move has shaken Birganj’s economy, which was just beginning to recover from last year’s blockade.

Rastra Bank resumed changing Indian currency two days ago, and hundreds of men and women lined up to change the weekly INR 1,500 limit by showing citizenship certificates. But they still cannot change Indian 500 and 1,000 notes.

Mahato exchanged Indian currency by showing his citizenship certificate on Wednesday, and went to the bank on Thursday as well with the citizenship card of a relative. His sons also queued up with their own citizenship cards to exchange more money.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) estimates that the demonetisation has made at least INR 8 billion worthless in Nepal. Besides traders, businessmen and those living in border towns, Nepali migrant workers, students, tourists and pilgrims in India have been most affected by the decision.

Rischal Thapa, a Nepali who works for Axis Bank of India, says: “Beside migrant workers, students are the hardest hit because they do not have bank accounts.”

After a telephone conversation between Prime Minister Pushpa Kamal Dahal and Modi early this week, the Reserve Bank of India has formed a committee to exchange the bills for Nepalis, but the crisis has not eased.

Devraj Air of All Indian Nepali Migrant Workers Society in New Delhi says: “We cannot exchange currency on our own, those who can are ready to help, but give us only IRs 400 for every IRs 500.”

Meanwhile, the Rastra Bank has set up a committee to finalise a modality to exchange Indian currency. India is suspicious that Indian citizens can exchange their black money in Nepal and in absence of a modality that allows only Nepalis to exchange their legal Indian currency.