Central bank starts distributing fresh banknotes for Dashain
REPUBLICA
KATHMANDU, Sept 22: With Dashain just round the corner, Nepal Rastra Bank (NRB) has started distributing fresh banknotes to banks and financial institutions (BFIs) to ensure easy availability of crisp notes in the market during the festival.
The central bank said it has Rs 100 billion worth of fresh notes of different denominations. In order to fulfill the demand for crisp notes during the festive season, the central bank has already flushed its branches in Pokhara, Siddharthanagar, Janakpur, Biratnagar, Birgunj, Nepalgunj and Dhangadi with ample fresh banknotes, said NRB Spokesperson Bhaskar Mani Gyawali.
"Likewise, 66 Note Funds, which Nepal Bank Limited (NBL) and Rastriya Banijya Bank (RBB) operate on our behalf in different districts, too have received Rs 41 billion worth of new notes," he told Republica.
Through these networks as well as its counter in Thapathali, Kathmandu, Gyawali said the central bank has already supplied new notes to a majority of BFIs in the Kathmandu Valley. Few BFIs are yet to place request, he added.
"Dashain is a month away, but if people want, they can start acquiring the crisp notes now," said another NRB official. The demand for fresh notes, particularly of smaller denominations, rise sharply during the festival.
Given the trend, NRB has estimated that the total demand for fresh notes during this festive season could stand at around Rs 25 billion. The central bank has been acutely planning the supply of notes during Dashain festival as it had failed to pump out enough notes in 2009. That had created inconveniences and forced public to cut-down consumption.
However, NRB anticipates its preparedness will keep the business in normal state this year.
The central bank anticipates that the existing notes in circulation will fulfill the needs of a major chunk of population. Nonetheless, by the end of the festive season, it estimates the currency in circulation could increase by Rs 10 billion.
The central bank might be well prepared to manage the demand for bank notes, but it continues to worry over one crucial evil: higher rate of damages to bank notes during the festive season.
According to officials, some 80 percent of the new notes issued during Dashain are spoiled so badly that they cannot be reissued.
The normal life of Nepali paper money stands at 1.5 years. However, a large chuck of the money becomes unusable within a year due to users´ mishandling. And notes freshly issued in Dashain cannot be reissued after three months.
"This is unwanted loss," said a NRB official. Given that the cost is eventually met with taxpayers´ money, the central bank has been urging the people to handle the bank notes with care.
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Central Bank Starts Distributing Fresh Banknotes For Dashain
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