KATHMANDU - Visiting Governor of Reserve Bank of India (RBI) D. Subbarao said on Friday that the RBI could permit operation of Indian currency denominated INR 500 and INR 1,000 in Nepal if the governments of two countries decide to this regard. Amid concerns involving the use of the fake and counterfeit note of IC denominated in bigger amount, India has been prohibiting their use outside its territory. IC notes are used in Nepal and Bhutan but upto denomination of INR100. “We are concerned on the growing usages of fake and counterfeit IC notes and also about money laundering,” said Subbarao at an interaction at Nepal Rastra Bank. “The RBI is ready to change the existing policy if the governments of two countries decide to change it.” Subbarao, whose term as RBI governor extended this week for 2013, arrived here at the invitation of the NRB governor Yubaraj Khatiwada. At the interaction organised by Nepal’s central bank at its office premises, Subbarao also showed similar concern regarding allowing Nepali money transfer agency to work in India to cash in on the possibility of bringing remittance from millions of Nepalese working there. “Looking at the possibility of transfer of the fake and counterfeit currency, we have put some restriction on money transfer from such agencies,” said the RBI governor. He was not supportive to the idea of permitting Nepali money transfer agencies to enter into India for job. During the interaction, NRB governor Yubaraj Khatiwada said that Nepal was always adjusting its policy with that of India symmetrically in order to maintain ongoing peg of Nepali currency with that of India. The RBI Governor arrived for a courtesy visit will return back on Saturday.
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