Nepal lifts ban on Rs 200, Rs 500 Indian notes after a decade

Nepal has eased restrictions on carrying high-denomination Indian currency in the Himalayan nation, ending a decade-long ban, according to an official statement. Individuals can hold Indian banknotes of Rs 200 and Rs 500 up to a maximum limit of INR 25,000 per person. The decision was made during Monday's cabinet meeting. Under the revised provision, both Nepali and Indian citizens may bring the higher denomination bank notes into Nepal from India or carry them from Nepal to India.

The Cabinet decision follows amendments by the Reserve Bank of India to the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015.The amendment permits Indian, Nepali and Bhutanese nationals to carry higher-denomination Indian currency while travelling to and from India. According to Nepal Rastra Bank (NRB) spokesperson Guru Prasad Paudel, once the government decision is published in Nepal gazette, NRB will issue a circular to this effect that would legalise the use of higher denomination Indian bank notes by individuals travelling to Nepal from India or from Nepal to India. This will facilitate tourists as well as business people from both countries to travel or carry out business with each other's country. “This was our longstanding request and India responded positively,” Poudel said.

The restrictions have hurt Nepal’s tourism sector as well, particularly casinos and hospitality businesses that cater to Indian visitors. Without the ability to carry higher-value notes, Indian tourists cannot spend freely, leading to lower revenues in border towns. Tourism entrepreneurs say many Indians are unaware of the currency rules, leading to frequent arrests and fines.