NRB notifies centres to replace old bank notes with new ones

HIMALAYAN NEWS SERVICE

KATHMANDU: The currency notes with the former kings’ portraits will only be exchanged at district offices of the central bank, branches of Nepal Bank Ltd and Rastriya Banijya Bank which deal with government transactions and operate the central bank’s note fund and few other designated branches of some commercial banks, according to the central bank.

“The central bank will withdraw around Rs 10 billion currency notes with the former king’s portrait from the circulation by mid-March,” Gopal Kafle, Deputy Governor of the central bank, said, adding that the withdrawn notes will not go back in circulation but that does not mean that the currency held by public will be demonetised as the currency’s intrinsic value will be intact.

By the beginning of March, Nepal Rastra Bank (NRB) had successfully withdrawn around Rs 18 billion currency notes in circulation from the market that bore the portrait of former monarchs.

The central bank is implementing the Clean Note Policy (CNP).

Nepal Rastra Bank (NRB) had introduced Clean Note Policy (CNP) in this fiscal year’s monetary policy in order to displace the old currencies with the former kings’ portraits from circulation and inculcate the careful handling of the bank notes among banks and public.

As per the policy, by the mid-March -that is March 14, the central bank had decided to completely pull all the old currencies. The remaining currencies in circulation after the cut-out period will not be easily accepted as it is at present.

NRB also aims at curbing the habits of banks and financial institutions that mutilate the notes by unnecessarily stapling and re-stapling the bundle of notes multiple times, with the strict implementation of CNP.

“NRB will not accept any bundle of notes that is stapled more then once, the banks and financial institutions have to take back and take the extra stapler pins out,” he informed.

The bank notes need to be replaced regularly as an average age of a note ranges from one year to one and a half year, in Nepal. After being in circulation for more than a-year-and-a-half Nepali notes’ security features get compromised so that it becomes difficult to identify whether the note is counterfeit or real mostly due to reckless handling of the notes.

Due to careless handling of notes by the public and the banks as well, the central bank needs to print the new notes every two years. The cost of both printing new currencies and destroying the old ones is adding a substantial liability for NRB.

“NRB is constantly conducting workshops and seminars to educate public regarding CNP. We will broadcast documentaries and advertise regarding the policy in order to create awareness,” informed deputy governor Kafle.