Central Bank Scraps Fixed Festive Dates for Exchanging New Banknotes

Nepal Rastra Bank has discarded its customary practice of setting a fixed schedule for distributing freshly printed banknotes ahead of Dashain and Tihar, choosing instead to provide exchange services as part of its regular daily operations.

Members of the public can now exchange small-denomination notes during normal office hours directly at the central bank's counters in Thapathali as well as through commercial bank branches nationwide, according to coverage by Setopati and The Kathmandu Post. The central bank has already disbursed fresh currency consignments to licensed commercial banks and financial institutions so customers can access the facility locally without gathering in long lines.

Anuj Dahal, executive director and head of the Currency Management Department at Nepal Rastra Bank, told Onlinekhabar that the central bank refrained from issuing a formal festive circular this year. Dahal noted that note exchange is fundamentally an ongoing administrative function that should respond directly to market demand rather than specific religious holidays, adding that recent deadly disasters across the country had also tempered festive enthusiasm.

Under the existing arrangement, individuals can obtain up to two sets or bundles of retail notes covering the Rs 5, Rs 10, Rs 20, Rs 50, and Rs 100 denominations, according to Onlinekhabar. A standard bundle comprises 100 notes of each denomination, amounting to Rs 18,500. While fresh banknotes are offered as long as inventory lasts, Dahal noted that clean, circulated notes will be provided once new reserves run out or when larger commercial requests are submitted.

To further alleviate counter congestion during the festival rush, commercial lenders are also preparing automated teller machines to dispense Rs 100 banknotes alongside the usual Rs 500 and Rs 1,000 bills, Setopati reported, adopting a measure long recommended by bankers.

The Kathmandu Post reported that Nepal Rastra Bank typically releases between Rs 60 billion and Rs 70 billion from its vaults during the festive season, of which Rs 12 billion to Rs 15 billion reaches everyday consumers. However, overall physical cash demand has softened in recent years due to the rapid growth of electronic payment channels. Managing paper currency incurs roughly Rs 3 billion annually in printing and logistics costs, creating a recurring burden for the central bank.

The low-key currency distribution coincides with broader efforts to regulate domestic liquidity. Earlier in the week, Artha Sansar reported that the central bank moved to mop up Rs 30 billion in surplus banking liquidity through a 30-day deposit collection tender, reflecting abundant idle funds across commercial lenders.