Nepal Lifts Decade-Long Ban on High-Denomination Indian Currency for Travellers

Nepal has lifted a decade-long restriction on carrying high-denomination Indian currency, as per an official announcement. Individuals can now possess Indian banknotes of Rs 200 and Rs 500, with a cap of INR 25,000 per person. This decision was reached during a cabinet meeting on Monday, according to sources within the cabinet.

The change follows amendments by the Reserve Bank of India to the Foreign Exchange Management Export and Import of Currency Regulations, 2015. These amendments allow Indian, Nepali, and Bhutanese nationals to carry higher-denomination Indian currency when travelling to and from India. The revised provision enables both Nepali and Indian citizens to bring these banknotes into Nepal from India or take them from Nepal to India.

Impact on Tourism and Business

The easing of currency restrictions is expected to benefit tourists and business people travelling between the two countries. According to Guru Prasad Paudel, spokesperson for Nepal Rastra Bank (NRB), once the government decision is published in the Nepal gazette, NRB will issue a circular legalising the use of higher denomination Indian banknotes for individuals travelling between Nepal and India.

Paudel stated, "This was our longstanding request and India responded positively." He highlighted that many Nepalis travel to India for various reasons, and the currency restrictions have posed challenges for a long time, especially for migrant workers earning in India.

Challenges Faced by Migrant Workers

Migrant workers often had to bring their earnings home in low-denomination notes, increasing their vulnerability to theft during travel. Many Nepalis have faced legal issues for carrying Rs 500 and Rs 1,000 notes in the past. The Kathmandu Post reported that several individuals were jailed due to these restrictions.

The tourism sector in Nepal has also suffered due to these limitations. Casinos and hospitality businesses catering to Indian visitors experienced reduced revenues as tourists could not spend freely without higher-value notes. Tourism entrepreneurs noted that many Indians were unaware of the currency rules, resulting in frequent arrests and fines.

This policy change aims to alleviate these issues by allowing smoother financial transactions for travellers and businesses alike. The new regulation is anticipated to boost economic activities in border towns by facilitating easier spending for Indian tourists.

With inputs from PTI