Early this month, the Royal Monetary Authority (RMA) issued a notice stating that Indian rupee bank notes of denomination 500 and above will not be allowed use in the country.
The Deputy Governor of RMA, Yangchen Tshogyel, said that it is not the decision of RMA to not allow the use of INR 500 and 2,000. “It is the decision of the Reserve Bank of India (RBI) as the Indian rupee is their currency,” she said.
“No person shall be allowed to bring in or take out of Bhutan INR bank notes of denomination 500 and above except in the case of tourists visiting Bhutan. The bank notes shall be detained on entry to be returned upon exit,” states the RMA notification.
Deputy Governor Yangchen Tshogyel said unfortunately it is inconvenient for Indian tourists to carry a huge amount of INR 100 denomination, however, there is nothing much RMA can do until further notice from the RBI.
Even in 2015, after the RBI gave approval, INR 500 and 1,000 were allowed up to a certain limit in the country. The main reason for holding back the usage of these denominations was because of problems such as money laundering and counterfeit notes.
“It could be the same reason for not allowing this time as well,” said Yangchen Tshogyel.
Yangchen Tshogyel also said that RBI is very clear that INR 2,000 will not be allowed use in the country but RMA is discussing with the RBI to allow INR 500 in the country. “We are still waiting to hear from RBI,” she said.
However, until further notice from the RMA, INR 500 and 2,000 will not be allowed to be used in the country.
The government on November 9 last year announced the demonetization of INR of denomination 500 and 1,000 in the country after the Prime Minister of India, Narendra Modi, on November 8 declared that the use of all INR 500 and 1,000 notes would be invalid after midnight.
Currently, RMA has INR reserve of about 20bn, which is 30% of the total reserve. “Unlike the previous months, we are very comfortable at the moment,” said Yangchen Tshogyel, adding that RMA still encourages Bhutanese people to deal with bank transfer of INR instead of dealing with hard cash.