MONEY»
IC black market thrives in Tarai
BIRATNAGAR, AUG 27 -
Traders engaged in illegal trading of Indian currency (IC) are selling it at the rate of Rs. 165 per IRs. 100 while the official rate fixed by Nepal Rastra Bank is Rs. 160.
Black marketeers have been using ATM cards obtained from more than two dozen commercial banks in Nepal to withdraw millions of rupees worth of IC from banks across the border in India.
The illegal traders usually hop across the border to the towns of Jogbani, Farbesganj and Purnia to withdraw IC from ATMs there.
Indian police last week arrested Rakesh Kumar Bhagat, an Indian black marketeer who had been using ATM cards of 13 different Nepali banks, from the counter of the State Bank of India.
Tulsi Ram Agrawal, a board member of NIC Bank, said banks were forced to pay Rs. 5,000 extra per IRs. 100,000. “The IC which the Biratnagar branch of NRB has been providing to money exchangers ends up in the hands of black marketeers resulting in a shortage in the local market.”
Entrepreneurs said many exchange counters were sending the IC received from NRB directly to such illegal traders. NRB has been providing IRs. 40,000 each to exchange counters daily.
“Black marketeers crowd around the exchange counter from early in the morning before the money arrives from NRB,” said a source.
The source added that the traders were taking the IC received from NRB to the bordering Indian markets like Jogbani, Chopraha, Sikti, Kursakatta, Kasat, Kuwadi and Fulbadia.
According to an entrepreneur, they are forced to pay a higher rate for IC as traders at the Nepal-India border accept only IC in payment for business transactions.
Traders could withdraw IC equivalent to Rs. 200,000 daily as per NRB regulations. The limit was later reduced to Rs. 100,000. Binum Shrestha, chief of Kumari Bank, Biratnagar, said traders are now allowed to withdraw IC equivalent to only Rs. 40,000 per day. The traders have been using IC released by NRB in the markets of the eastern Tarai to import goods illegally from India.
Entrepreneurs and local residents have also been paying large amounts of IC in premiums to Indian insurance companies. Insurance agents said that this was resulting in IC worth millions of rupees being sent to India every month.
Nepal has been purchasing IC by paying for it in US dollars. According to economist P.K. Jha, the illegal trade in IC is also contributing to Nepal’s widening trade deficit with India.
Posted on: 2010-08-28 09:06
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