Cash crisis eases

The shortage of notes slightly eased on Thursday after the central bank injected additional bank notes worth Rs 600 million into the market. This is the highest single day release of notes in the past few weeks.

A Nepal Rastra Bank (NRB) official said the bank released 1000-rupee notes worth Rs 600 million. He said the 100-rupee notes worth Rs 410 million that arrived on Thursday will also come into circulation soon.

"Of the Rs 410 million 100-rupee notes that the NRB received on Thursday, Rs 210 million will be circulated in Kathmandu, Rs 150 million in Pokhara and Rs 5 million in Birgunj," the official said.

A leading banker said the cash flow situation slightly improved on Thursday after the NRB released at least Rs 100 million to commercial banks. The NRB had released just Rs 3 million to commercial banks a day earlier.

As an indication of improvement in cash supply, some of the leading banks raised withdrawal limit from Automated Teller Machines (ATMs). NABIL Bank that had set withdrawal limit of Rs 3,500 on Wednesday raised the limit to Rs 5,000 on Thursday.

According to the official, NRB governor held consultations with the chiefs all leading commercial banks to assess their demand for cash. "Of the 26 banks, 12 banks informed that they immediately needed bank notes worth Rs 100 million while the remaining 14 banks said they were in need of bank notes worth Rs 200 million. This means the release of additional bank notes worth Rs 400 million will be enough to meet the immediate demand before Dashain," he said.

He also expressed confidence that the shortage will end after the festival because the central bank will receive a fresh supply of 500-rupee notes worth Rs 15.5 billion in the first week of October.

"The consignment of notes has already left the Malaysian port. It is expected to reach Kolkata on October 1. There will be no shortage of bank notes after Dashain as the government is planning to airlift the notes to Kathmandu," he added.

Apart from this, the huge amount of cash (estimated to be around Rs 15 billion) withdrawn for festival expenses and other motives will also come back to circulation after the festival, he added.
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