Higher denomination notes in short supply

ATMs closed, banks’ ceiling on withdrawal ahead of Dashain

The Nepal Rastra Bank (NRB) is facing a tough time ahead of Dashain. There is an acute crisis of currency notes of higher denomination.
Krishna Bahadur Manandhar, deputy governor, NRB, however, failed to allay revellers’ apprehension. “A shipment, carrying Rs 12 billion, is only expected on October 6. It will help tide over the scarcity,” he said. But that makes little sense for the revellers. Dashain will be over on October 3. A team of Nepal Bankers’ Association (NBA), too, lodged a complaint with the NRB about the looming crisis.
In a departure from the norm, a few desperate bankers were compelled to accept Indian Currency (IC) to meet the growing customers’ demand. But a peeved banker pointed out the legal constraints of paying the customers in IC. In the run up to the festive season, a bank requires around Rs 1 billion in cash daily to pay the customers.However, Manandhar explained the logistical problem that led to the crisis.
“We’ve been expecting the consignment from France earlier. But it got delayed due to unavoidable circumstances. The shortage stands at Rs 4,800 million,” he explained. As the crisis deepened, some banks were forced to shutdown their ATMs from this evening.
A few banks have put a cap on withdrawal as well. A depositor cannot withdraw more than Rs 1 lakh. Agriculture Development Bank Nepal has instructed its branches not to pay more than Rs 25,000, sending the customers into a tizzy.
“Though the central bank gave us Rs 10 million today, the demand is five fold,” said a banker.Uma Kant Thapaliya, president, NRB Employee's Association (Thapathali), said that there had also been an increased demand for lower denominations
.“This year, we’re not giving more than Rs 4,000 in lower denominations to an individual. This is half of the usual amount during the festive season,” he said.
He took a dig at the NRB for mismanagement, alleging it has been able to fulfill only 10 per cent of the demand. Thapaliya said that the crisis could have been averted had a proper planning was in place around six months ago.

NDB depositors withdraw cash
KATHMANDU: Around 60 depositors of the Nepal Development Bank (NDB) on Tuesday withdrew Rs 4.84 million — 50 per cent of their deposit. The withdrawal process took place between 3 and 5pm. “It’ll continue for the next two days," said Kirti Madan Joshi, president, Nepal Bikas Bank Pidith Sangh. On Friday, the Patan Appellate Court had directed the Nepal Rastra Bank (NRB) to release funds for the cash-strapped depositors. Subsequently, the central bank released Rs 27.9 million on Sunday. The court has ordered the NRB to let the depositors withdraw 50 per cent of their sum but not exceeding Rs 2 lakh.