Central bank postpones currency notes with former king's portrait withdrawal

The central bank has decided to postpone the phaseout of currency notes with the former king's portrait today until another month.
"Due to a small technical problem, it has to back track the decision to withdraw currency notes with the portrait of former king for the time bring," said a higher official at the central bank.
Someone complained at the Commission for Investigation of Abuse of Authority (CIAA) pointing out the technical error of the central bank prompting the anti graft constitution body to jump into the action.
The central bank has, however, realised its technical fault and promised to correct it soon.
"The decision to phase out or demonitise any currency notes should be published in the government Gazette," said secretary at the CIAA Bhagwati Kafle. "Only after the publication of such notice in the government Gazette, the central bank can phase out or even demonitise bank notes of any denomination," he said, adding that the central bank has, however, taken the decision on the basis of another notice that was to replace 'Shree Panch ko Sarkar' to 'Nepal Sarkar' in the bank notes -- published in the Gazette.
According to the Nepal Rastra Bank Act, the central bank board has to recommend the government for phase out of any currency notes and the government decision has to be published in the government Gazette.
The cabinet on June 12, 2010 had decided to phase out the currency notes with former king's portrait with that of Mt Everest to reflect the change in the country that has turned into republic. The cut off date was fixed for March 14.
The central bank has worked out the Clean Note Policy according to the decision and designated the banks' branches to replace the currency notes with the former king's portrait.
Though some quarters suspect the political pressure on the central bank's back tracking of the decision and postponing it, the CIAA denied it.
There is a speculation that some of the political forces are hoarding the cash and are shying to replace them fearing the exposure.
The bankers belive that the horading has created the current cash crunch in the banking channel.
However, the central bank officials denied any such possibilites. They informed that Rs 10.16 billion worth currency notes with various denomination that have former king's portrait is in circulation in the market.
The currency notes with the Mt Everest began to appear after 2006 when the country was declared republic. Though, the central bank is only withdrawing the currency notes with the former king's portrait and not demonitising them, the general people thronged the designated branches of various banks yesterday fearing demonitising of their currency notes.