KATHMANDU: Reserve Bank of India has agreed to allow travellers to carry 200 and 500-rupee Indian currency notes in Nepal.
Bhisma Raj Dhungana, executive director of the Foreign Currency Exchange Department of Nepal Rastra Bank, said that the ban may be lifted soon.
On January 20, the Nepal Rastra Bank issued a circular prohibiting Nepali travellers, banks and financial institutions from holding or carrying and trading Indian bank notes higher than 100 rupees.
Following the ban, traders and locals in markets located along the Nepal-India border had criticised the government’s decision to prohibit the use of 200-, 500- and 2,000-rupee Indian currency notes in the country. They said that the ban would have a negative impact on the exchange of goods and services between the two neighbouring countries. Almost all market towns located along the border have been using Indian currency for payment.
The decision was also a big setback particularly for cash-driven industries like tourism at a time when Nepal had announced the Visit Nepal 2020 campaign, with an objective to bring 2 million tourists, majority of them from India.
Travel trade entrepreneurs had said that since India is the biggest tourism source market for Nepal, its impact would be huge. As middle-class Indians are the key visitors to Nepal, traditionally they don’t carry plastic money and prefer visiting Nepal with a pocketful of cash. According to Indian media reports, the advantage of travelling to Nepal was that one did not need to change the currency.
According to Dhungana, if the 200 and 500-rupee Indian currency are opened, it would facilitate import-export between the two neighbours.
The Reserve Bank of India, in February 2015, introduced the Foreign Exchange Management Regulations, allowing Nepali and Bhutanese citizens to carry Reserve Bank of India currency notes of denomination INR500 and/or INR1,000 up to a limit of INR25,000.