Kathmandu, July 24: Nepal Rastra Bank (NRB) has officially allowed the use of Indian Rs 200 and Rs 500 currency notes in Nepal after completing the required procedural arrangements.
According to the central bank, Indian currency notes of denominations up to Rs 500, issued after November 9, 2016, can now be brought into or taken out of Nepal in line with existing regulations. These notes can also be used for transactions in the Nepali market, and banks have been authorised to exchange them without difficulty.
Issuing a directive on Thursday, the NRB implemented the Nepal government’s decision to permit the use of these Indian currency notes. Indian Rs 500 and Rs 1,000 notes issued before November 2016, which were demonetised by India, remain prohibited in Nepal.
Similarly, the central bank has maintained a ban on carrying, transporting, or holding Indian Rs 2,000 notes. It also clarified that Indian currency cannot be brought into or taken out of Nepal through any country other than India.
The issue dates back to November 8, 2016, when the Indian government demonetised the old Rs 500 and Rs 1,000 notes. The move also affected Nepal, where high-denomination Indian currency had been widely used.
At the time, more than Rs 700 million worth of Indian Rs 500 and Rs 1,000 notes were held within Nepal’s banking system. Despite repeated efforts by Nepal to exchange those notes, the Indian government did not approve the request. As a result, Nepal subsequently prohibited the use of high-denomination Indian currency.
NRB spokesperson Guru Paudel said the restrictions have now been eased after a mechanism was established allowing commercial banks to collect eligible Indian currency notes from the public, send them to Nepal Rastra Bank, and enable the central bank to deposit them into its account with the Reserve Bank of India.
Last year, the Reserve Bank of India amended its Foreign Exchange Management Regulations, 2015, allowing high-denomination Indian currency notes to be carried between Nepal and India.
Under the revised RBI rules, any amount of Indian currency in denominations up to Rs 100 may be brought into or taken out of India without any limit. For denominations above Rs 100, individuals are allowed to carry up to Rs 25,000 between Nepal and India.
Following the RBI’s amendment, the Nepal government also approved the use of higher denomination Indian currency notes. However, the policy had not been implemented until now because procedural arrangements were still pending. With those formalities completed, Nepal Rastra Bank has put the decision into effect from Thursday.
People’s News Monitoring Service
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