Govt steps in to difuse currency note crisis

In a bid to overcome the acute crisis of high denomination currency notes during Dashain, the Finance Ministry has decided to airlift the ‘delayed consignment’ from France, which is on its way to Kolkata Port, within next five days.
The move comes in the wake of mounting pressure from the bankers and public alike.
Taking into account the looming crisis at hand, the Finance Ministry formed a three-member high-level committee late this evening. The panel will probe the delay in both print and supply of the currency notes.
Former National Planning Commission vice-chairman Prof Dr Mangal Siddhi Manandhar, former finance secretary Bhanu Prasad Acharya and Comptroller General Abinendra Kumar Shrestha are the members of the panel. Porf Dr Manandhar is the coordinator of the committee, which will submit the report within 21 days.
Finance Minister Surendra Pandey, who chaired the meeting, took extraordinary measures to diffuse the crisis. The panel instructed the central bank —Nepal Rastra Bank (NRB) — to distribute the airlifted-cash to the banks during Dashain holidays also.
As a stopgap measure, the old notes in the stock and higher denomination ones of around Rs 940 million — signed by ex-governor Tilak Rawal that had certain “minor technical errors” — will also be circulated from tomorrow. But given the crisis, the amount is insignificant.
The panel has also decided to airlift the notes to other districts which have to contend with an acute cash crunch. The crisis that precipitated around a week ago had led the banks and financial institutions to ration the distribution of cash.
Typically, the demand for currency notes peak during the 10-day Dashain. As per the tradition, offering cash is as much an integral part of the festivity as the shopping spree. A section of the banks have shutdown their ATMs due to shortage of cash and others lowered the withdrawal limits.
With no end to the crisis in sight, the banks had also started paying in Indian Currency (IC) even though it is against the NRB’s norms.
The French company, which bagged the tender to print Nepali currency notes, missed the delivery deadline by two months. It delivered only 25 per cent of the order last week, while, the rest is expected next month by October 6 at Kolkata Port. The NRB has penalized the company for the inordinate delay. Be that as it may, the public have been hit hard by the crisis.
Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed concern over the shortage of currency notes in banks and financial institutions.