Nepal has eased restrictions on Indian currency notes after nearly a decade, allowing Indian and Nepalese citizens to carry redesigned Rs 200 and Rs 500 notes issued after November 9, 2016.
The Nepal Rastra Bank (NRB) said Indian and Nepalese nationals can now bring into or take out of Nepal these currency notes up to a limit of Rs 25,000 per person. The overall carrying limit remains unchanged.
The move ends a long-standing restriction introduced after India’s 2016 demonetisation, when Nepal had limited the use and movement of higher denomination Indian currency notes.
The NRB reissued the notice on Thursday to clarify the implementation of the revised rules. The provisions had earlier been published in the Nepal Gazette on February 11 after the required regulations were framed.
What are the new currency rules?
Under the revised rules, Indian and Nepalese citizens travelling between India and Nepal can carry:
Indian Rs 200 notes issued on or after November 9, 2016.
Indian Rs 500 notes issued on or after November 9, 2016.
The total value of Indian currency carried by an individual cannot exceed Rs 25,000.
However, old Indian Rs 500 and Rs 1,000 notes issued before November 9, 2016, will continue to remain prohibited in Nepal.
The NRB has also clarified certain conditions related to cross-border movement of Indian currency. Nepalese citizens cannot bring Indian currency into Nepal from any country other than India. They also cannot take Indian currency from Nepal to a third country, except India.
Why was the restriction introduced?
The restrictions date back to India’s demonetisation announcement on November 8, 2016.
At that time, the Indian government withdrew the old Rs 500 and Rs 1,000 notes from circulation and introduced redesigned currency notes. The move created challenges for Nepal, where Indian currency is widely used for travel, trade and everyday transactions.
Nepal had banned Indian currency notes of more than Rs 100 denomination after the announcement. As a result, the newly introduced higher denomination notes could not be used by the country’s travellers and businesses.
The Rs 25,000 limit on carrying Indian currency remained in place, but the practical use of that amount was restricted because only lower denomination notes were permitted.
Why does the change matter?
India and Nepal share an open border, with frequent movement of people between the two countries. Indian tourists regularly visit Nepal, while thousands of Nepalese citizens travel to India for work, education, business and other purposes.
Indian currency also plays an important role in border areas, where small traders and local businesses often conduct transactions across the two countries.
The NRB said the revised provision would help Indian tourists visiting Nepal and Nepalese citizens involved in trade and business activities with India.
Foreign currency rules remain separate
The NRB notice also includes rules for foreign currencies. Nepalese citizens and foreign visitors can carry up to $5,000 or its equivalent in other foreign currencies without making a customs declaration.
Amounts above this limit must be declared to customs authorities.
For Indian currency, travellers can carry amounts equivalent to up to $5,000 without declaration only when the denominations do not exceed Rs 100. If the amount crosses the permitted limit, customs declaration requirements apply.
A limited relaxation after years of restrictions
The latest decision provides more flexibility for travellers and businesses dealing with India, but it does not remove all restrictions on Indian currency.
The change mainly allows the use and movement of newer Rs 200 and Rs 500 notes while keeping the Rs 25,000 ceiling and restrictions on older demonetised notes intact.
For travellers, the key point is that post-2016 Rs 500 and Rs 200 Indian notes can now be carried within the existing limit, making cash transactions between India and Nepal easier than before.
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