You can now use Indian ₹200, ₹500 notes in Nepal
What's the story
Nepal Rastra Bank (NRB) has relaxed its restrictions on the carrying of Indian currency by Indian and Nepali citizens. The new rule permits the carrying of Indian currency notes of ₹200 and ₹500 denominations issued after November 9, 2016, up to a limit of ₹25,000 per person. This is a major change from the previous rule that only allowed notes up to ₹100 denomination after India's demonetization in 2016.
Implementation
Older Indian notes still prohibited in Nepal
The NRB has clarified that the new rules apply to Indian currency notes brought into or taken out of Nepal, subject to existing regulations.
However, older Indian ₹500 and ₹1,000 notes issued before November 9, 2016, remain prohibited in Nepal.
Guru Prasad Paudel, an NRB spokesperson, said these changes will ease travel for Indians visiting Nepal and help Nepali citizens engaged in trade with India.
Currency movement
Restrictions for Nepali citizens on carrying Indian currency
The new rules also restrict Nepali citizens from bringing Indian currency into Nepal from any country other than India.
They are also not allowed to carry Indian currency from Nepal to a third country, except India.
However, the NRB has maintained separate rules for other foreign currency, with Nepali citizens and foreign visitors allowed to bring up to $5,000 or equivalent in other foreign currencies into Nepal without customs declaration.
Historical context
Why were restrictions imposed?
The restrictions on Indian currency in Nepal were imposed after India's November 2016 demonetization, when the government withdrew old ₹500 and ₹1,000 notes from circulation.
In response, Nepal restricted the entry and use of those demonetized Indian banknotes.
The new rules differentiate between these old demonetized notes and newer ₹200 and ₹500 denominations issued after November 9, 2016.