In a significant move to ease cross-border financial transactions, Nepal has officially removed restrictions on carrying high-value Indian currency notes, ending a prohibition that lasted for ten years. The decision, taken during a Cabinet meeting on Monday, marks a pivotal shift in the financial dynamics between the two neighbouring nations.
Details of the New Currency Rules
The revised provisions now permit both Nepali and Indian citizens to possess and carry Indian banknotes of Rs 200 and Rs 500 denominations. The official statement clarifies that individuals can hold these notes up to a maximum limit of INR 25,000 per person. This applies to travellers bringing the currency into Nepal from India or carrying it from Nepal to India.
This policy change follows recent amendments by the Reserve Bank of India (RBI) to the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. The RBI's amendment allowed Indian, Nepali, and Bhutanese nationals to carry these higher-denomination notes while travelling to and from India.
Implementation and Expected Impact
According to Nepal Rastra Bank (NRB) spokesperson Guru Prasad Paudel, the central bank will issue a formal circular to legalise the use of these notes once the government decision is published in the Nepal Gazette. Paudel highlighted that this was a "longstanding request" from Nepal, to which India responded positively.
The move is set to have wide-ranging positive consequences:
- Relief for Migrant Workers: A large number of Nepalis working in India have faced immense difficulties, often forced to bring their earnings home in low-denomination notes, making them targets for theft.
- Boost for Tourism and Business: The restrictions had adversely affected Nepal's tourism sector, especially casinos and hotels catering to Indian visitors. The inability to carry high-value notes curtailed spending by Indian tourists, hurting revenues in border towns.
- End to Legal Troubles: The Kathmandu Post report noted that many Nepalis have been jailed in the past for carrying Rs 500 and Rs 1,000 notes. The new rules will prevent such incidents and ease travel anxiety.
A Step Towards Smoother Bilateral Ties
This decision is more than a financial adjustment; it is a facilitative step strengthening people-to-people and economic links. Tourism entrepreneurs have long pointed out that many Indian tourists were unaware of the old currency rules, leading to frequent fines and arrests. The new clarity is expected to encourage more seamless travel and business exchanges.
By aligning its regulations with India's amended rules, Nepal has effectively removed a longstanding irritant in cross-border movement. This proactive measure is anticipated to foster greater economic cooperation, provide security for hard-earned remittances, and enhance the experience for millions of travellers crossing the open border each year.
