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Nepal bans new Indian Rs 2000 and Rs 500 notes

“As of now, our understanding with the RBI is that a Nepali citizen can hold up to Indian Rs 25,000 [in the] old Rs 500 and Rs 1,000 notes. The fate of those old notes is uncertain. How can these new Indian notes coming into the market be considered legal?”

Nepal’s central bank has banned the exchange of the new Rs 2,000 and Rs 500 Indian currency notes within the country till the Reserve Bank of India issues a notification under the Foreign Exchange Management Act, Times of India HAS reported.

The Nepal Rastra Bank said the new Indian notes, which have appeared in border areas dues to the open border, cannot be exchanged until India accords approval.

Ramu Poudel, chief of the NRB’s eastern region, told members of business community in Biratnagar that the new Indian rupee notes in Nepal will be considered as “illegal” until new facilities of exchange are determined by the Indian apex bank.

“As of now, our understanding with the RBI is that a Nepali citizen can hold up to Indian Rs 25,000 [in the] old Rs 500 and Rs 1,000 notes. The fate of those old notes is uncertain. How can these new Indian notes coming into the market be considered legal,” he asked.

Earlier, a ban was in effect in Nepal till last year against the use of Rs 500 and Rs 1,000 denominations notes. Authorities had lifted this ban after the visit of Prime Minister Narendra Modi to Nepal. Nepal then allowed people to bring in up to Rs 25,000 in higher-denomination Indian currency notes.

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