Bhutan Lifts Ban On Rupee Note, Advises Against Holding Indian Currency In Cash
Bhutanese can now bring new series of INR 500 notes in and out of Bhutan.
By Kinley Yangden | Bhutan Times
Bhutan’s Royal Monetary Authority (RMA) has issued a notification last week allowing Bhutanese to carry INR 500 notes in and out of the country, subjected to a limit of INR 25,000.
In the notification, RMA also advised Bhutanese against holding INR currency notes in cash, for fear of “demonetization of INR currency notes in the future”, and to deposit any INR earnings into their accounts maintained with commercial banks here.
It added: “RMA shall not be liable or responsible in case of any policy changes by the Reserve Bank of India, including demonetization of INR currency notes in the future.
Affected by demonetization in India
Bhutan, along with Nepal, were caught off guard in November 2016 when India demonetized 80 per cent of its currency notes and replaced them with new notes of different denominations. India claimed that this was a move against black money and counterfeit currency.
Bhutan uses the Indian currency as legal tender within its borders and this move affected trade between the two countries, causing a ripple effect that was felt from farmers to traders, and even in the tourism industry.
Quota on withdrawing new Indian notes
A strict daily quota on withdrawing new Indian notes was imposed in December 2016. Hundreds lined up outside RMA to exchange Ngultrums for India Rupees, most of whom were pilgrims who were planning on visiting holy sites in India.
Lotteries were held and only a handful of lucky ones were allowed to get INR 5,000 notes at one go.
In August 2017, the RMA had also issued a notice informing the public that the INR 500 and INR 2,000 denominations were not permitted in exchange in Bhutan, urging the public from accepting the denominations “in any mode of business in Bhutan”.
RMA warns against counterfeit notes
In addition to its latest notice on lifting the ban, the RMA also cautioned the public against counterfeit INR 500 notes and advised “all individuals to be vigilant and careful while accepting this denomination”.