E-Kantipur

KATHMANDU, AUG 28 -

Bearing in mind the surge in demand for fresh currency notes during the Dashain festival, Nepal Rastra Bank (NRB) has decided to increase note circulation by 40 percent this year compared to last year.

The central bank has already started distributing necessary notes to its branches. Central bank officials said they will complete distributing notes to all seven NRB branches and its note funds in Nepal Bank Limited (NBL) and Rastriya Banijya Bank (RBB) within mid-September.

The central bank also made it clear that it has enough notes to meet the demand, assuring that there will not be note scarcity during the festival as seen two years ago. Shortage of notes during Dashain two years ago is considered as one of the key factors behind dwindling public confidence in banks and financial institutions (BFIs).

According to NRB, it is sending clean notes worth around Rs 28 billion for this year’s Dashain. Last Dashain saw use of notes worth Rs 20 billion. “On the basis of price rise of goods and salary hike of government employees, we have decided to increase the volume of notes by 40 percent,” said a senior NRB official. “We expect a demand of Rs 28 billion during this year’s Dashain.”

The central bank will also make available clean notes to other BFIs as per the demand. “We will issue a notice about distribution of notes for Dashain,” said NRB Spokesperson Bhaskarmani Gyawali. NRB has made it clear that all notes will not be new, but they will be clean. “We have notes in our note vault as old as one and a half years,” said the NRB official.

When the note crisis hit BFIs two years ago a head of Dashain, NRB had sought apology for the ‘delay in supply’ by the printing company. “We learnt a lesson from the negative impact of the non-availability of notes,” said the NRB official. Such was the crisis in 2009 Dashain that the central bank was forced to set a limit on the amount of fresh notes to be provided to BFIs.

A high level probe committee formed to investigate the note shortage had blamed managerial weakness of the central bank for the note crunch. The investigation had stated that there had been a number of incidents of carelessness and negligence in handling the supply of notes both at the operational as well as policy level. The report had also found that the central bank lacked a scientific system to project the demand of notes, which meant that the entire note supply mechanism was running on ad hoc basis.

Posted on: 2011-08-28 09:35

Post Your Comment

Please note that all the fields marked * are mandatory.
* Full Name
* Address
* Email Address
* Comment
* Captcha	Get another CAPTCHA code
Note:	Comments containing abusive words or slander shall not be published.