After almost a decade, Nepal is preparing to make a big change regarding the Indian currency. The Government of Nepal and Nepal Rastra Bank (NRB) have moved closer to allowing circulation of Indian currency notes in denominations above ₹100. The move is expected to provide relief to people moving between India and Nepal, especially migrant labourers, students, pilgrims, medical visitors and tourists, from their long standing currency problems.
Nepal Rastra Bank spokesperson Guru Prasad Paudel said in this regard that the process is now at a crucial juncture. According to him, “We are in the final stage. We are preparing to publish the notice in Nepal Gazette and then issue circular to banks and financial institutions about the new rule.” This information has come to light in a report of Kathmandu Post. Paudel also clarified that the official date of the new rule has not been decided yet, but the process is “in the final stages.”
The restrictions imposed on the Indian currency have had the biggest impact on Nepal’s tourism sector, especially on casinos, hotels and hospitality businesses that cater to a large number of Indian tourists. According to Kathmandu-based sources, many Indian passengers unknowingly violated the rules, due to which they had to face fines or detention. If large Indian currency notes are re-recognised, it will not only increase the convenience of tourists but will also give a boost to the local economy.
Currently, all tourists, including Indians, visiting Nepal can bring a maximum of US$ 5,000 or its equivalent in other convertible currencies without declaration. Any amount greater than this must be declared at customs, and no more than $5,000 is allowed to be taken out of the country. India remains the biggest source of tourists for Nepal, hence relaxation in currency rules is considered important for the people of both the countries.
The rules regarding Indian notes have changed from time to time. In February 2015, the RBI allowed Nepalese to carry ₹500 and ₹1,000 notes up to ₹25,000. Earlier, due to security reasons, passengers were limited to ₹100 notes. However, after the demonetization of 2016, the situation became tough again. Nepal has also long been seen as a transit point for counterfeit Indian currency smuggled into India, leading both countries to take precautions.
If Nepal officially allows Indian currency notes above ₹100, it would be considered a practical and people-centric step in India-Nepal relations. This will ease cross-border movement, promote tourism and remove long-standing problems in everyday transactions to a great extent.
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