Nepal opens currency route, allows Indian notes up to INR 25,000

In a move aimed at further strengthening the close economic and people-to-people ties between the two neighbours, Nepal has eased restrictions on the movement of Indian currency, allowing Indian and Nepalese citizens to carry Indian notes of Rs 200 and Rs 500 denominations up to a value of INR 25,000 while entering or leaving the country.

The relaxation, however, applies only to currency notes issued on or after 9 November 2016. The Nepal Rastra Bank (NRB), in a recent notice, clarified that old Indian currency notes of Rs 500 and Rs 1,000 denominations issued before 9 November 2016, will continue to remain prohibited in Nepal.

The central bank stated that Indian and Nepalese nationals can bring into Nepal, carry within the country, or take out Indian currency notes of Rs 200 and Rs 500 issued after the specified date, subject to existing regulations and a limit of INR 25,000 per person.

Although the provisions had already been published in the Nepal Gazette on 11 February, the NRB issued a fresh notice on Thursday to reiterate the rules and provide greater clarity on their implementation.

Explaining the finer details of the regulation, NRB spokesperson Guru Prasad Paudel said Nepalese citizens would not be permitted to bring Indian currency into Nepal from countries other than India. Similarly, Indian currency cannot be taken from Nepal to a third country, except India.

The revised arrangement is expected to provide greater convenience to Indian tourists visiting Nepal and Nepalese citizens involved in trade, business and frequent cross-border movement. The two countries share deep-rooted cultural links, an open border and extensive economic exchanges.

India remains Nepal’s largest trading partner and a major source of tourists, while thousands of Nepalese citizens travel to India for employment, education and business opportunities.

The NRB notice also outlined rules for foreign currency. Nepalese citizens and foreign visitors can bring up to USD 5,000 or its equivalent in other currencies into Nepal without a customs declaration. Any amount exceeding this limit must be declared upon arrival.

The latest decision comes nearly a decade after India’s demonetisation exercise in November 2016, when the government withdrew old Rs 500 and Rs 1,000 notes from circulation and introduced redesigned currency notes. Following the move, Nepal had restricted the use and circulation of the older Indian denominations within its territory.

The new relaxation marks a significant step towards smoother financial transactions between the two neighbouring nations while maintaining regulatory safeguards against misuse of currency flows.

With PTI inputs