Economy

Cash shortage almost over: NRB

Published by Octron on October 5, 2009

Nearly three-week long cash shortage in the banking system has eased down remarkably, as hard cash started coming back to banking channel after the end of Dashain festival. Most of the capital-based leading banks are of unanimity that the flow of notes into the system has almost come to normalcy.

“Almost 90 percent of the cash shortage problem has been solved and the remaining 10 percent will disappear once the central bank receives fresh supplies of notes, which is expected by the by the end of this week,” Sashin Joshi, president of Nepal Bankers´ Association told Republica.

Intra-bank transfer of surplus funds, which was put in place before the festival, will continue for some more time as it greatly helped to deal with the crisis, Joshi added.

According to bankers, some of the banks in emerging cities outside the capital, however, are still facing mild pressure of higher withdrawals but overall situation is within manageable limit.

The net inflow of hard cash was more than the outflow in most of the banks on Sunday that greatly helped them to regain the hard cash balance, said the banker. “This indicates the improve confidence of depositors toward banks,” the banker said.

A senior officer of Nepal Rastra Bank (NRB) also expressed confidence that the ongoing mismatch between the demand and supply of bank notes will end by the end of this week. “The present mismatch that is estimated to be around Rs 4 billion will be sorted out once the central bank receives a record new 500-rupee notes amounting Rs 15.5 billion,” the officer said. If things go as planned, the fresh notes will be loaded on 6 October to transport to Nepal from Kolkotta and will enter the county on 8 October, said the official.

Though the official admitted that there were some weaknesses with the management of fresh notes, he maintained that the stock of fresh notes will attain normal level to face any expected demand of notes when the central bank receives a huge amount of new 100-rupee notes printed by an Indonesian company by the end of 2009.

Meanwhile, Nepal Rastra Bank called the chief executive officers of all the 26 commercial bank at its office on Sunday and assured that the central bank has managed enough stock of notes.

According to a banker who attended the meeting, NRB governor Bijaya Nath Bhattarai told bankers that along with the new deposits that the banks have started receiving, the NRB will also get a fresh supply of notes, most probably, by Thursday.

“As the shortage of notes will completely end by the end of this week, there is no reason to panic,” the banker quoted governor Bhattarai as saying.

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