Nepal eases post-demonetisation curbs on Indian currency; allows ₹200, ₹500 notes
UPSC / SSC current affairs note · Economy
Why in news
Nepal has lifted a nearly decade-long restriction on Indian currency notes of ₹200 and ₹500 denominations, which were banned after India's 2016 demonetisation. The Nepal Rastra Bank reissued a notice clarifying the revised rules, allowing Indian and Nepalese nationals to carry these notes up to ₹25,000 per person. This move is expected to facilitate Indian tourists and cross-border trade.
Background
India demonetised ₹500 and ₹1,000 notes on November 8, 2016, introducing redesigned ₹500 and new ₹2,000 notes (later withdrawn). In response, Nepal prohibited Indian currency notes above ₹100 denomination, restricting travellers to ₹100 notes only. The ban lasted nearly a decade until the recent revision.
Key facts
Nepal now allows Indian and Nepalese nationals to carry Indian currency notes of ₹200 and ₹500 denominations (issued on or after November 9, 2016) up to ₹25,000 per person.
The Nepal Rastra Bank reissued the notice on Thursday (July 23, 2026) to reiterate rules; the provision was first notified in the Nepal Gazette on February 11, 2026.
Nepalese nationals cannot bring Indian currency into Nepal from any country other than India, nor carry it from Nepal to a third country except India.
Travellers can bring up to USD 5,000 or equivalent in foreign currencies without customs declaration; amounts exceeding USD 5,000 must be declared.
For Indian currency, travellers may bring up to USD 5,000 equivalent without declaration only if denominations do not exceed ₹100; otherwise, declaration is mandatory.
Indian currency notes of ₹500 and ₹1,000 issued before November 9, 2016, remain prohibited in Nepal.
The revised rules aim to facilitate Indian tourists and Nepalese nationals engaged in trade and business with India.
Prelims pointers
- Nepal Rastra Bank: Central bank of Nepal.
- Demonetisation: India demonetised ₹500 and ₹1,000 notes on November 8, 2016.
- New notes introduced: Redesigned ₹500 and new ₹2,000 notes (₹2,000 later withdrawn).
- Currency limit: ₹25,000 per person for Indian currency in Nepal.
- USD limit: USD 5,000 without customs declaration.
- Nepal Gazette: Official publication for government notifications.
Mains angles
- Discuss the impact of India's demonetisation on bilateral economic relations with Nepal.
- Analyse the role of currency regulations in facilitating cross-border trade and tourism between India and Nepal.
- Examine the challenges and benefits of harmonising currency policies among neighbouring countries.