E-Kantipur

KATHMANDU, MAY 18 - People wanting to withdraw Indian currency from ATMs will henceforth have to get a separate debit card. Nepal Rastra Bank (NRB) is preparing to launch an IC debit card system to discourage the rising use of IC in cash.

The central bank has made a policy to discourage the use of IC in cash form as it is being used for illegal trade across the border and also to transfer capital out of the country.

NRB has already limited withdrawals of IC to IRs. 25,000 a day whether they are made through cheques or ATMs.

“People will have to obtain a debit card of a certain value, and it cannot be used to withdraw additional cash,” said a senior NRB official who did not want to be named. “If they need additional cash in IC, they have to approach the banks with the necessary paperwork.”

The NRB official said that the provision regarding this would be introduced shortly after discussing it with the banking community.

“We have floated the idea and we will finalise the modality after holding talks with bankers,” the official said.

However, president of the Nepal Bankers Association Sashin Joshi said that they had not received such a proposal from NRB. “|Allowing withdrawal of IC through the existing card system may be adequate because we

can identify people using ATMs frequently to withdraw IC,” he said.

Some banks have already reported that they have cancelled the ATM cards of some customers who used their cards frequently to withdraw IC right after depositing money in their accounts in Nepali currency.

Amid a rising demand for IC in cash in border towns, the exchange rate has reached up to Rs. 170 on the black market for IRs. 100. People were found to have sold IC at a higher exchange rate on the black market by frequently withdrawing IC from bordering Indian towns with their ATMs.

NRB believes that genuine importers use letters of credit,

TT and other documents to make payment in IC to their suppliers

in India.

Posted on: 2010-05-18 08:13

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