Nepal is losing foreign exchange due to illegal Hundi operations

Loading...

As he inaugurated the ‘Sydney contact office’ of a commercial bank on April 2, senior Nepali politician Ram Sharan Mahat no doubt knew he was doing the right thing for the health of the nation he was the finance minister of.
After all, a regulated body like Global IME Bank would be a good way to discourage illegal Hundi operations which, according to news reports, are seriously harming the Himalayan nation at macro-economic level. Experts clearly believe Nepal is losing foreign exchange due to illegal Hundi operations.Hundi is a traditional method of remittance which, by its very nature, does not necessarily follow the strict guidelines that financial organisations are otherwise required to observe. Under the system, the money one sends may not make all the way to Nepal but instead gets diverted to businessmen in third countries who in turn put the fund to their own use, mostly to smuggle gold, Nepal Rastra Bank believes.
According to Kantipur Publications, Nepal’s biggest media outlet, Nepal Rastra Bank (the central bank of Nepal) is concerned with the dwindling rate of remittance growth. It is noteworthy that remittance is the biggest contributor to the foreign exchange reserve of the country.

Loading...