Jaigoan merchants charge 6 % and more as an exchange rate for Bhutanese who use Bhutanese Ngultrum for trade
Due to the pandemic, the border town of Bhutan’s commercial capital, Jaigoan has changed in many ways. The number of shops have reduced and infrastructure has to be improved. However, what has not changed is Bhutanese having to pay extra when goods are purchased using the Bhutanese Ngultrum. While, sources close to the paper said this is rampant, Jaigoan merchants deny, saying they have stopped the practice.
Sidhu, a local resident of Jaigaon said he learned about it from Bhutanese people. “And I saw that for every Nu 100, Nu 1 is deducted,” he said, adding that the deductions are more when the money involved is huge. Bhutanese paying in Ngultrum (cash) to Indian businessmen have to pay 6 % as exchange charge. “Any Bhutanese paying Nu 100,000 to Indian counterparts in Jaigaon have to pay Nu 6,000 extra. For every Nu 100, Nu 1 is deducted,” he said.
A Bhutanese fruit vendor in Phuentsholing said that she recently bought fruits worth Nu 100,000. She paid Nu 6,000 extra as transaction charge levied by Indian dealers for paying in Bhutanese Ngultrum.
Tshering Nidup, a Bhutanese driver shared that he witnessed Bhutanese business individuals were charged extra when payments were made in Bhutanese Currency by Indian counterparts in Jaigaon. Prior to the pandemic, the charge was only 5 %. But it has now increased to 7-8 % after the borders were opened. “If 6% is charged, you are lucky,” a businessman from Phuentsholing said.
Moreover, Bhutanese are taken advantage of especially when there are emergencies. “The exchange charge is mostly applied when Bhutanese exchange IC during urgencies like planning to go to India for religious tour and medical treatment,” he said.
However, merchants in Jaigoan refute the claims. Bicky of Jimmy Enterprise from Jaigoan said that Bhutanese and Indian currencies have equivalent rate and that he does not charge Bhutanese customers who pay in Mgultrums. He said that the people of Jaigoan and Phuentsholing have good relation and business persons from Jaigoan cannot charge Bhutanese customers when they pay Ngultrums. “I myself use Ngultrum in Jaigoan to buy vegetables and groceries items.”
The general secretary of Jaigaon Merchant Association, RS Gupta said that there has been a talk amongst the people of Phuentsholing and Jaigaon a long time back. There are talk in the town that Indian entrepreneurs are charging Bhutanese customers when BC is involved.
However, he said that he did not find such business happening in Jaigaon. The general secretary said there has been talks on this issue but it has never been solved. If the issue is to be solved he said, “Royal Monetary Authority should come up with resolute solutions,” adding Bhutan should have enough INR currency reserve.
Since its introduction in 1974, Bhutanese currency is Ngultrum and is officially pegged at par with the Indian Rupee. The arrangement has been beneficial to Bhutan for achieving and maintaining price stability, trading activities, servicing external debt, and for reference. The one-to-one peg between the value of Ngultrum and Rupee was maintained because of the good economic linkages between the two countries.
Sangay Rabten from Thimphu