A high-level meeting of government officials on Wednesday authorized the central bank to send 940,000 units of 1000-rupee stored notes carrying the image of former King Gyanendra into circulation. It also formed a high level probe team to investigate the whole saga of note shortage.Banks paying in IC, note crunch worsens
According to a press release issued by the finance ministry, the notes were printed some three years ago but were not sent into circulation after detecting a minor print mistake on the back side of the notes. Given the severity of the note shortage, the meeting agreed in principal to circulate the notes bearing the signature of former governor Dr Tilak Rawal.
Though the volume of the notes is not enough to meet the demand that is estimated to be around Rs four billion at present, it is expected to ease the demand pressure, states the release.
The meeting chaired by the finance minister was attended by finance secretary, NRB governor and deputy governors, and vice chairman of National Planning Commission, among others.
A meeting of Works
Management Committee of the NRB that is responsible for finalizing the note releasing procedures is likely to take a final decision in this regard on Thursday.
Sources informed myrepublica.com that most of the participants at the meeting expressed dissatisfaction over the decision of Nepal Rastra Bank on Tuesday to allow commercial banks to pay their depositors in Indian currency. However, NRB officials refuted the allegation that it authorized the commercial banks to pay their depositors in IC and said that commercial banks were found releasing the IC as per the existing rules and demand of depositors.
The meeting formed a three-member high-level probe team led by lawmaker Mangal Siddhi Manandhar to investigate into the causes that created note shortage. The panel has also been asked to identify those responsible for the crisis. Former Finance secretary Bhanu Prasad Sharma and Financial Comptroller General Arabinda Shrestha are the members of the committee.
The formation of the committee will be formally announced by next cabinet meeting and the proposed committee will be asked to submit its report within 21 days. In addition, the committee will also suggest measures to lower demand of cash for transactions by encouraging consumers to use debit and credit cards.
The meeting also instructed the central bank to arrange quickest means to bring the printed notes that are on their way to Nepal. It asked the NRB to use aircraft to bring the notes at the earliest.
Meanwhile, the central bank on Wednesday lowered the fresh cash supply to local banks to conduct daily transactions to Rs 2 to 3 million whereas demand of each bank per day has been around Rs 600 million.
Source:Republica
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