Starting May 8, the central bank will lift restrictions on withdrawal of Ngultrums against deposits of the demonetised Indian Rupee (INR) notes.
This means, those maintaining INR accounts will be allowed to withdraw their deposits in Ngultrums. In a press release, the Royal Monetary Authority of Bhutan (RMA) announced that, “the lien on the withdrawal of Ngultrum counter-value against the public deposits of the demonetised Indian Rupee notes will be lifted from May 8, 2017.”
On November 18 last year, the central bank froze withdrawals of Ngultrums in exchange for demonetised INR notes of 500 and 1,000 denominations by Bhutanese individuals and companies.
Depositors must sign a letter of undertaking with the bank and produce citizenship identity cards along with their taxpayer or business license numbers. According to the press release, a few INR deposits, however, are still under the review of relevant authorities and the restriction on those accounts will be lifted only upon clearance by the relevant authorities.
“We would like to thank the general public for your patience as both the government and the RMA worked with our counterparts in India to resolve the issue,” it stated.
Industries require INR to pay truckers for transportation of finished goods from and to India. Industries are completely dependent on Indian transporters for both inward and outward movement of goods.
The central bank froze the accounts following the demonitisation of Rs 500 and 1000 banknotes by the government of India in November 8. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.
The sudden nature of the announcement—and the prolonged cash shortages in the weeks that followed—created disruption throughout the economies of India and Bhutan.