The Nepal Rastra Bank has officially authorized the use of 200 and 500 denomination Indian currency notes within Nepal. Indian rupee notes issued after November 9, 2016, are now permitted to be brought into Nepal, carried across borders, and transacted in the Nepali market. Central Bank spokesperson Guru Poudel announced that once all necessary procedural requirements were fulfilled, the use of these rupee notes was made legal.
Kathmandu, 23 July – The Nepal Rastra Bank has established formal provisions to allow the use of Indian banknotes in denominations of 200 and 500 rupees. Having completed the required procedural arrangements, the Central Bank has opened the use of these notes. According to the Central Bank, Indian rupee notes of denominations up to 500 issued after November 9, 2016, can now be imported to or exported from India. These notes can be freely transacted in the Nepali market, and banks are authorized to engage in easy exchange of these notes.
On Thursday, the Central Bank issued an order implementing the Government of Nepal’s decision to permit the circulation of these rupee notes. However, Indian 500 and 1000 rupee notes issued before November 2016 remain prohibited for use. Similarly, the circulation or possession of 2000 rupee notes currently in use is also restricted. The Central Bank has clarified that Indian rupee notes cannot be brought into or taken out from countries other than India.
In November 2016, the Indian government demonetized 500 and 1000 rupee notes issued before that date, which had a significant impact in Nepal. High denomination Indian rupee notes were widely used in Nepal’s banking sector, with approximately 70 million rupees in 500 and 1000 denominations held in Nepali banks. Despite repeated efforts, Nepal was unable to get permission from India to exchange these notes, leading to a halt in their usage within Nepal.
Now, Nepali banks can accept these notes from the public and send them up to the Nepal Rastra Bank, which will then deposit them into its account with the Reserve Bank of India (RBI). Following these arrangements, the use of the higher denomination Indian rupee notes has been reopened, explained Central Bank spokesperson Guru Poudel. Last year, the RBI amended the Foreign Exchange Management Act 2015 to permit the transportation of high denomination Indian rupee notes between Nepal and India. Under this new regulation, 100 rupee notes can be brought without limit, whereas notes above 100 rupees can be carried in amounts up to 25,000 rupees.
Following the RBI’s policy change, the Government of Nepal also opened the use of high denomination Indian notes. However, the Central Bank awaited completion of all procedural requirements before implementation. Now that these prerequisites are in place, the use of these notes has officially commenced from Thursday onwards.
