For failing to convince the State Bank of India to extend overdraft facility from 3b to 10b Indian Rupee, the Royal Monetary Authority (RMA) has borrowed US$ 35.9 million from the Punjab National Bank of India this week.
The RMA stated that it decided to borrow the loan at 10.5 percent interest to replenish the ongoing Rupee crunch in the country. The central bank was paying a 9.5 percent interest on the SBI borrowings.
The RMA took the decision when the central bank failed to convince its Indian counterpart, according to the report.
The State Bank of India has been asking the central bank to “provide enough justifications on the Rupee crisis”. Otherwise, India was to extend the overdraft limit to 10b last month.
According to reports from inside, most of the banks didn’t issue any Indian Rupees to their clients for the past three days.
Druk PNB Bank Limited, the first FDI bank in Bhutan is a joint venture bank of Punjab National Bank, India and local promoters. DPNBL started its operations in Bhutan on January 27, 2010 by opening first branch at Thimphu. Later on two more branches started functioning at Phuentsholing & Wangdue.
