KATHMANDU, Aug 25: With the shortage of US dollars becoming acute, commercial banks are preparing to bring the greenback from their accounts in foreign banks. The banks are still undecided about the volume of dollar bills they wish to bring in to ease the shotage of the U.S. currency in Nepal.
Though the country has large reserves of foreign exchange, the shortage of US dollars is mainly due to the preference of Nepalis travelling abroad for carrying cash rather than other instruments such as debit cards.
"Since it has been difficult to meet the cash demands of those who really need it, some of the banks, including Himalayan Bank Ltd, are planning to bring in US dollars from their accounts abroad," said Ashok Shumsher JB Rana, CEO of Himalayan Bank. "They have been in talks and are weighing the cost of bringing in the cash, the process involved and the volume that they can bring, " added Rana. He said they have requested Standard Chartered Bank Nepal Ltd (SCBNL) to work out on the possibilities, the costs and other details.
SCBNL's corporate affairs head Diwakar Poudyal told Republica that bringing the US currency was still in the exploratory stage. "We are still exploring the cost, safety and insurance and other details," he added.
Since the demand fluctuates and the cost of transport is yet to be calculated, the bankers say they will withdraw the money from their foreign accounts only after calculating the cost of bringing it to Nepal. HBL CEO Rana told Republica that his bank's tentative plan is to import around $ 500,000. "However, let's see how costly it will be," he added.
The banks' plan to bring the cash by air cargo comes following a request by Nepal Rastra Bank (NRB) to ease the supply of the greenback in the face of rising demand, according to a banker who spoke on condition of anonymity.
"The central bank requested banks to bring the cash to ease supply, at a meeting held at the NRB today," said the banker.
There have been widespread complaints by those who want to travel abroad about the shortage of US dollars. The central bank allows a person to take up to $500 on the basis of the visa, air ticket and personal requirements. But banks in recent days have been turning away people without giving them a single dollar, citing the shortage of the greenback.
Officials at the central bank attribute the shortage to people's obsession with the US dollar bill. "It's not the shortage of US dollars. We have quite a lot of foreign currency. But people do not like to use instruments like debit cards while travelling abroad," said Bhisma Raj Dhungana, executive director at NRB.
He said the central bank was ready to help banks interested in bringing the greenback. According to Dhungana, Nabil Bank, SCBNL, Nepal Investment Bank Ltd and NIC Asia have shown interest in doing so.
Similarly, Nabil Bank is also planning to fly in US dollars. According to Sashin Joshi, CEO of Nabil Bank, they are mulling the move. "But there are extra costs involved and we are still undecided over the amount we will bring," he added.