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Nepali currency being taken to Khasha in high volume

It has been revealed that a significant volume of Nepali rupee is being taken to Khasha, China, through the Tatopani customs point, although the currency is not exchangeable in China.

Banks and the Tatopani Customs Office have reported that Rs 30 million is moving out of the country every day on an average. About Rs 1 billion is being withdrawn by Chinese traders every month from banks operating in Tatopani.

“Chinese nationals visit banks with bearer cheques for withdrawal. We can’t deny payment if the accounts concerned have enough balance,” said a bank’s branch manager. “The rate of withdrawal is high, but we are unaware why the withdrawals are taking place.”

Another bank official said Rs 10 million is being withdrawn daily from his bank. “The trend has increased notably over the last six months,” he said.

While importing goods from China, payment is made in US dollars and imports are recorded. But in this case, there are no records of imports. This suggests that the payment is being made for other hidden reasons. “Even if goods are imported by paying Nepali currency, at least there should be records of duty payment,” say customs officials.

Customs officials speculated that Chinese traders might be using Nepali currency to purchase Yarshagumba from Dolpa residents. But banks say Yarshagumba might not be the sole reason as withdrawals have increased immensely over the last year.

According to the Nepal Rastra Bank (NRB), the existing foreign exchange law forbids the movement of Nepali currency to China. “It is illegal to take Nepali currency to Khasa,” said Bhasker Mani Gnawali, spokesperson for NRB.

Nepali banknotes that are taken to Khasha must come back, as Nepali rupee is not exchangeable in China. But bank employees said the currency is not coming back, creating crisis in banks. Banks are even failing to meet withdrawal demand, they said.

With this increasing trend of currency outflow to Khasa, the customs office has started keeping records of transactions. “We keep records of Chinese taking amounts exceeding Rs 200,000,” said Nirmal Hari Adhikari, chief at Tatopani Custom. “Although there is no clear law, we are keeping records on our own.”

There has also been a significant rise in police seizures of Nepali banknotes being taken to China. Police seized Rs 4.9 million from Bandew checkpoint in Sindhupalchowk in March. Likewise, Rs 1.5 million was seized from from Araniko Highway in May.

source: The Kathmandu Post,27 June 2012



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