Nepal allows Indian Rs 200 and Rs 500 notes, ends nearly decade-long restriction

Nepal has allowed Indian and Nepalese nationals to carry Indian currency notes of Rs 200 and redesigned Rs 500 denominations into and out of the country, ending a nearly decade-long restriction that had been in place since India’s 2016 demonetisation. The move is expected to facilitate tourism, trade and cross-border travel between the two neighbouring countries.

The Nepal Rastra Bank (NRB), in a notice reissued on Thursday, said Indian and Nepalese nationals can carry Indian currency notes of Rs 200 and Rs 500 denominations issued on or after November 9, 2016, up to a limit of Rs 25,000 per person in accordance with existing regulations.

What has changed?

Following India’s demonetisation on November 8, 2016, Nepal had prohibited the entry and use of Indian currency notes above the Rs 100 denomination. Although travellers could carry up to Rs 25,000 in Indian currency, the restriction on higher denominations meant only Rs 100 notes and below were permitted.

Under the revised regulations, Indian and Nepalese nationals can now carry redesigned Rs 500 notes and Rs 200 notes issued after November 9, 2016, while the overall limit of Rs 25,000 remains unchanged. However, Indian Rs 500 and Rs 1,000 notes issued before November 9, 2016, will continue to remain prohibited in Nepal.

NRB clarifies implementation of the rules

The central bank said the revised provisions had already been notified through a notice published in the Nepal Gazette on February 11 after the required regulations were framed. The latest notice was reissued to reiterate the rules and provide clarity on their implementation.

NRB spokesperson Guru Prasad Paudel clarified that Nepalese nationals cannot bring Indian currency into Nepal from any country other than India. Similarly, they cannot carry Indian currency from Nepal to a third country, except India.

According to Paudel, the revised provision will make travel easier for Indian tourists visiting Nepal and Nepalese citizens engaged in trade and business with India.

Rules for carrying foreign currency

The NRB also said Nepalese nationals and foreign visitors can bring up to USD 5,000 or its equivalent in other foreign currencies into Nepal without making a customs declaration. Any amount exceeding USD 5,000 must be declared to customs upon arrival.

In the case of Indian currency, travellers may bring in an amount equivalent to up to USD 5,000 without a customs declaration only if the denominations do not exceed Rs 100. If the amount exceeds the USD 5,000 limit, a customs declaration is mandatory.

Why the move matters

India and Nepal share an open border and strong people-to-people ties, with India being Nepal’s largest trading partner and one of its biggest sources of tourists. Thousands of Nepalese citizens also live, work, study and conduct business in India.

The latest decision is expected to make travel and cross-border financial transactions more convenient by allowing the use of higher-denomination Indian currency notes that have been in circulation since India’s demonetisation in 2016.

(With inputs from PTI)

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