Currency notes to shed off crown
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KATHMANDU, MAR 17 - Nepal Rastra Bank (NRB) has started taking currency notes portraying former kings out of circulation. From the next fiscal year, the notes will have no trace of anything that resembles monarchy in any way.
NRB plans to remove all notes that feature the crown from the market by the next fiscal year that begins mid-July.
“We have started dumping notes portraying the crown at our store since the last 2-3 months,” said an NRB official.
The official however said that the central bank has not taken any decision regarding the legal status of such notes that may still be in circulation after the new fiscal year.
According to NRB, there are notes portraying the crown worth Rs. 88.37 million in circulation. NRB has been destroying 300 bundles of old notes every day. A bundle has 1,000 pieces.
An NRB official said that with the destruction of notes featuring the crown, the likelihood of more notes remaining in the market was slim.
About two months ago, Finance Minister Surendra Pandey had asked the central bank to issue notice for withdrawal of such notes from the public. But, an NRB official said the measure could be taken only after a few months if a huge number of such notes were still in circulation.
This policy is also expected to address the liquidity crisis to some extent by drawing in notes stored by individuals. This could help banks improve their liquidity situation as the credit and deposit (C/D) ratio will come down. High C/D ratio caused by excessive lending against deposit is considered a major factor behind the ongoing liquidity crisis.
NRB also said it was bringing in new notes within a few months that would be sufficient for three and a quarter years. “There won’t be a cash crunch in the market when notes featuring the crown are disposed of,” the NRB official said.
Posted on: 2010-03-17 08:36
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