Nepal, India explore interbank channel for large Indian currency transfers
Summary
Nepal and India are discussing an interbank system to allow large volume transfers of Indian currency between their banks, aiming to simplify cross-border currency handling and ensure financial stability.
Key Points
- Nepal and India are exploring an interbank mechanism to transfer Indian currency in large volumes between banks of the two countries.
- Nepal Rastra Bank is awaiting formal approval from the Reserve Bank of India before issuing implementation circulars for Nepali banks.
- This mechanism will prevent large Indian currency deposits from burdening Nepali banks by facilitating digital transfers across borders.
- The move is significant due to Indian currency stuck in Nepal following India's 2016 demonetisation of INR500 and INR1,000 notes.
