Nepal has officially allowed Indian and Nepali nationals to bring Indian currency notes in denominations of Rs 200 and Rs 500 into or out of the country, up to a limit of Rs 25,000, provided the notes were issued on or after November 9, 2016. The revised rules, announced by the Nepal Rastra Bank (NRB) on Thursday, aim to ease travel, trade, and business between the two neighbouring nations.
Key Provisions of the New Regulation
According to a notice issued by the NRB, Indian currency notes of Rs 500 and Rs 1,000 that were issued prior to November 9, 2016, remain strictly forbidden in Nepal. The central bank clarified that the new rules apply only to notes issued after India's demonetisation in 2016. The NRB had initially published these requirements in the Nepal Gazette on February 11, but the latest notice reiterates the restrictions and provides clarity on their implementation.
NRB spokesperson Guru Prasad Paudel explained on Saturday that Nepalese citizens are permitted to import Indian cash into Nepal only from India. They are not allowed to carry Indian currency from Nepal to any third country other than India. The new rules will make it easier for Nepalese citizens engaged in business and trade with India, as well as for Indians visiting Nepal, according to Paudel.
Impact on Cross-Border Travel and Commerce
The decision relaxes restrictions on the flow of Indian cash across the open border between the two countries, which share deep interpersonal and economic ties. Thousands of Nepalese work, study, and do business in India, which is Nepal's largest trading partner and top tourism source. The move is expected to reduce administrative hurdles for travellers and small traders who rely on Indian currency for daily transactions.
In addition to the currency rules, the NRB notice stated that foreign visitors and Nepalese citizens can enter Nepal with up to USD 5,000 or its equivalent in other foreign currencies without filing a customs declaration. Amounts exceeding USD 5,000 must be declared to customs upon arrival.
Context of Demonetisation
The regulatory change comes against the backdrop of India's demonetisation on November 8, 2016, when the government withdrew the old Rs 500 and Rs 1,000 notes from circulation. India replaced them with redesigned Rs 500 notes and new Rs 2,000 notes, which were later phased out. Nepal had restricted the use and transport of old Indian currency notes after demonetisation. The latest move by NRB signals a gradual normalisation of cash flow between the two countries.
“The new clause will facilitate Nepalese citizens doing business and trade with India as well as Indians visiting Nepal,” Paudel said, emphasising the practical benefits of the revised policy. The rule is expected to boost small-scale commerce and tourism, especially in border regions.
