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Exchange of Rs 4,500 in old notes allowed in Nepal: RBI

The Indian proposal has sent waves of nervousness among the Nepali public as India had earlier allowed Nepali citizens to possess up to Indian Rs 25,000 each.

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Kathmandu, March 26 : The Reserve Bank of India (RBI) will allow exchange of up to Rs 4,500 in banned Indian currency notes to each Nepali national, a visiting team of the Indian central bank here hinted on Sunday.

The Indian proposal has sent waves of nervousness among the Nepali public as India had earlier allowed Nepali citizens to possess up to Indian Rs 25,000 each.

An RBI team led by Dipali Pant Joshi, executive director, RBI, held talks with a Nepali team, led by Nepal Rastra Bank (NRB) Deputy Governor Chintamani Siwakoti, in Kathmandu and offered to provide exchange facilities up to INR 4,500 in banned Indian currency notes and gave one week’s window to complete the exchange formalities.

However, the Nepali side has been pushing to arrange facilities up to Indian Rs 25,000 which was earlier allowed to a Nepali citizen to hold legally.

If the Indian side remains adamant over the decision, many people who possess banned Indian rupee notes would suffer badly.

After both sides stated their respective positions, the next meeting has been scheduled for Monday, said officials at Nepal Rastra Bank, the central bank of Nepal.

Similarly, the Nepali side has conveyed to the RBI team that it is also impossible to exchange banned Indian notes within a week as the Nepali side is yet to conduct inventory of banned Indian bills possessed by Nepalis.

In response, the RBI team said it was ready to exchange Indian notes held with Nepali banking and financial institutions immediately but currency notes held by individuals should be exchanged through the banking system.

The Indian delegation arrived in Kathmandu on Saturday to hold discussions on extending exchange facilities to Nepalis who are holding banned Indian banknotes of Rs 500 and Rs 1,000 denominations.

This is the second time that the Indian team has visited Nepal to hold talks on allowing exchange facilities to Nepalis holding demonetised Indian bank notes.

Earlier, the Indian team had expressed fears about Nepal being used as a “clearing house” to channel illegally amassed banknotes into the Indian financial system.

The Indian government’s November 8 move to demonetise Rs 500 and 1,000 bank notes has caused inconvenience to many Nepalis, especially daily-wage earners and labourers working in India, and those visiting the neighbouring country for medical treatment, studies and purchasing goods from Indian markets in border areas.

Nepal’s central bank has been claiming that its financial system is holding Indian Rs 33.6 million at various banks and financial institutions besides NRB itself.

But the actual stock of banned Indian notes is expected to be much higher because Nepalis were previously allowed to carry Indian bank notes of Rs 500 and Rs 1,000 denominations amounting to Indian Rs 25,000.

Also, those residing in areas bordering India usually keep Indian notes of higher denominations as they have to visit Indian markets frequently to buy essential commodities.

(Anil Giri can be contacted at [email protected])

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ICICI Bank sets up presence in Nepal

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Mumbai, Dec 3: Lending major ICICI Bank on Thursday launched its operations in Nepal, via a representative office, to become the first Indian private sector bank to set up its presence in the country.

The bank opened a representative office in Kathmandu which will closely work with the domestic banks in Nepal to facilitate investment, trade, payments and treasury business between the two countries.

According to the bank, the current foray has expanded its global footprint to 15 countries including India.

“India and Nepal have significant trade and investment links between them. We believe that ICICI Bank’s on-ground presence through the new representative office coupled with its strong business partnerships with banks in Nepal, will help us further our participation in the economic flows between the two countries,” said Sriram H. Iyer, Head – International Banking Group, ICICI Bank.

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RBI asks HDFC Bank to temporarily stop issuing new credit cards

Furthermore, the filing said that these measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

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HDFC Bank

The Reserve Bank has asked HDFC Bank to temporarily stop all launches of the ‘Digital Business generating activities and sourcing of new credit card customers.

The RBI’s order dated December 2 comes after outages in the bank’s online facilities or payment utilities occurred over the past 2 years, including the recent incident in the internet banking and payment system on November 21, 2020 due to a power failure in the primary data centre.

In a regulatory filing, HDFC Bank on Thursday said: “The RBI vide said ‘Order’ has advised the Bank to temporarily stop i) all launches of the Digital Business generating activities planned under its program – Digital 2.0 (to be launched) and other proposed business generating IT applications and (ii) sourcing of new credit card customers. In addition, the Order states that the Bank’s Board examines the lapses and fixes accountability.”

Furthermore, the filing said that these measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

“The Bank over the last two years has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the Regulator in this regard.

“The Bank has always endeavoured to provide seamless digital banking services to its customers. The Bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations.”

In addition, the bank said these measures will not materially impact its overall business.

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Petrol, diesel become dearer after OMCs raise retail prices

The pump price of petrol increased by 17 paisa per litre on Thursday to Rs 82.66 a litre in Delhi from a level of Rs 82.49 a litre a day earlier.

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Oil marketing companies on Thursday increased the prices of petrol and diesel after keeping the retail prices unchanged for the past couple of days.

The pump price of petrol increased by 17 paisa per litre on Thursday to Rs 82.66 a litre in Delhi from a level of Rs 82.49 a litre a day earlier.

Similarly, the diesel price increased by 19 a litre to Rs 72.84 a litre in the national capital as compared to Rs 72.66 per litre on the previous day.

The prices of auto fuel have also increased across the country but the level of rise has been different depending on the taxation structure in each state.

In the past 14 days, due prices have risen 11 days with petrol prices rising by Rs 1.60 per litre and diesel by Rs 2.38 a litre.

The increase has been primarily on account of firming up of global oil and product prices following news of successful coronavirus vaccine.

Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2.

Though retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspend ended for almost two months to prevent volatility in international oil markets from impacting fuel prices regularly during the pandemic.

But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the patience was lost by OMCs who finally resorted to price increase to cover for their under recovery on the sale of two petroleum products.

The benchmark Brent crude has crossed $48 a barrel on Intercontinental Exchange (ICE) lately. It has remained an over $44 a barrel for most part of November.

OMCs need almost 40 paise per litre increase in retail price of petrol and diesel to cover for $ 1 increase in crude.

Going by this yardstick, product prices would have to be increased by upto Rs 2 per litre to cover under recovery on its sale.

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