KATHMANDU, Dec 5: India has lifted the ban on carrying Indian currency with denomination above INR 100 to Nepal.
Publishing a notice in the Gazette of India, the Reserve Bank of India (RBI) introduced the new provision effective for Nepal as well as Bhutan. As per the revised rule, the Indian government will now allow exchange of paper notes of denominations 200 and 500 for the cross-border visits.
“Individuals from Nepal or Bhutan may bring into India or take away from India currency notes of the Government of India and the Reserve Bank of India above INR 100 in either case,” reads the notice published in the Gazette of India. However, the Indian authorities have continued with the maximum limit of INR 25,000 for carrying across the border between the two countries.
RBI withdraws Rs 2,000 notes from circulation
By implementing the Foreign Exchange Management Act (FEMA), India's central bank since 2000 has been imposing restrictions against carrying Indian currency above the given denomination. For over two decades, the RBI has allowed the circulation of Indian currency notes of only Rs 100 and less in Nepal and provides exchange facilities for bills of these denominations.
Citing the possible smuggling of higher denomination currency notes and security reasons, the Indian authorities had been imposing the restrictions. Despite lifting the ban, Nepali citizens will not be allowed to take the Indian currencies to countries other than India.
Nepal Rastra Bank (NRB) has long been requesting Indian authorities to issue a notification to make Indian bank notes of denomination more than Rs 100 legal tender in Nepal. However, India’s central bank has not entertained Nepal’s request.
After the demonetisation of currency notes of INR 500 and INR 1,000 in November 2016, the Indian government started circulation of new bank notes of denominations INR 200, 500 and 2,000. However, the RBI did not issue a notice for the circulation of the new bank notes, making their use illegal in Nepal.
Guru Prasad Poudel, spokesperson for the NRB, said the revised provision by the Indian government will provide respite to tourists, students and workers of Nepal and India who frequently travel between the two countries. According to him, the provision will come into effect only after the NRB takes a decision.
