KATHMANDU, Sept 24: Nepal Rastra Bank (NRB) has instructed banks and financial institutions (BFIs) not to reimburse burnt paper currency unless the individuals concerned present a recommendation from the concerned authorities.
Citing that large amounts of paper notes were burnt during the Gen Z protests, the central bank said such notes can be exchanged only if they are supported by recommendations from the police and the local administration.
NRB Deputy Spokesperson Suman Neupane stated that paper notes that are burnt or have a smoky odor cannot be replaced without official recommendations.
Revised interest rate corridor system introduced
According to the NRB Act 2002, the central bank is not obliged to accept any note of which more than 50 percent of its surface has been torn, defaced, or mutilated, nor any counterfeit note. In addition, holders of damaged paper notes must comply with specific guidelines prescribed by the NRB.
“No individual may destroy or dispose of damaged banknotes, nor misuse, withhold, or distribute such notes for personal gain. Notes deemed unfit for circulation due to wear, illegibility, or other reasons must be properly disposed of as required by law,” the NRB regulations state.
During the recent Gen Z protests, demonstrators reportedly looted or burned bundles of currency worth millions from the homes of Nepali Congress (NC) President and former Prime Minister Sher Bahadur Deuba; Ganga Dahal, daughter of CPN (Maoist Center) Chairman and former Prime Minister Pushpa Kamal Dahal; and former Minister for Energy, Water Resources and Irrigation Deepak Khadka. Deuba’s spouse, Arzu Rana Deuba, had also served as foreign minister in the previous KP Oli-led government, while Ganga currently heads former Prime Minister Dahal’s personal secretariat.
Likewise, cash belonging to several private organizations was also burned during the violence that followed the Gen Z protests.
Citing the possibility of a large amount of looted banknotes from the burned residences of political leaders and private organizations, the Central Investigation Bureau (CIB) has launched an inquiry into the matter. “Through a public notice, we have requested the general public and stakeholders to inform the nearest police unit about anyone carrying burnt banknotes,” said Senior Superintendent of Police Hobindra Bogati of the CIB.
Under the Department of Money Laundering Investigation (DMLI) Act, any cash holdings exceeding one million rupees are subject to scrutiny, and individuals must disclose legitimate sources of income. Failure to do so constitutes a punishable offense under the Revenue Leakage (Investigation and Control) Act, 1995.
