RBI lifts ban on carrying 1,000 & 500 currency notes to and from Nepal, Bhutan

New Delhi: Reserve Bank of India (RBI) has lifted a ban on carrying Indian currency notes of Rs 1,000 and 500 denominations to and from Nepal and Butan.

RBI Governor Raghuram Rajan
RBI Governor Raghuram Rajan

RBI issued a circular eased the restriction on export and import of currency notes of 1,000 and 500 denominations for Nepal and Bhutan that it had imposed since May, 2000. The Reserve Bank, however, has put a limit of carrying such notes at Rs 25,000 per person.

Following the request of Indian government to curb smuggling of counterfeit currency, Nepal had also imposed a ban on carrying 500 and 1,000 denominated Indian currency notes in Nepal.

The restriction on carrying high denomination currency notes to and from India had created inconvenience to a large number of Nepali workers in India to remit their hard-earned money to Nepal.

Nepalese Government officials say lifting of the ban will provide a great relief to Nepali workers as well as Indian tourists travelling to Nepal.

Basudev Adhikari, director at Nepal Rastra Bank’s (NRB) Foreign Exchange Management Department, said the NRB would send a proposal to the government next week to lift the ban on the use of 1,000- and 500-rupee IC notes in Nepal through a notice in the Nepal Gazette.

NRB officials say the RBI move will benefit Nepal and Nepalis, especially Nepali workers in India. Currently, Nepali migrant workers have to return back Nepal with IC notes with smaller denominations, which makes it difficult for them to keep their earnings away from thieves and pickpocketers en route. Also, many migrant workers have faced jail in Nepal for carrying IC notes in IRs 1,000 and IRs 500 denominations.

“The RBI move will definitely give relief to Nepali migrant workers,” said Adhikari. “This will also help small-scale cross-border trade.”

The RBI move is also expected to address the shortage of IC notes in Nepal, with more Indian tourists expected to visit Nepal.