Nepal Plans to Allow Indian Currency Notes Above ₹100
Nepal is considering a proposal to allow the use of Indian currency notes of denominations higher than ₹100, a move aimed at easing cross-border travel and trade between the two countries. Senior officials familiar with the discussions said the plan is being examined by Nepal Rastra Bank in coordination with the government.
Existing Restrictions on Indian Currency
Currently, Nepal permits Indian currency notes only up to ₹100 for transactions within the country. Higher denomination notes such as ₹200, ₹500, and ₹2,000 are not legally accepted, despite their widespread circulation among travellers and traders along the India-Nepal border. The restriction has often caused inconvenience for tourists, migrant workers, and businesses engaged in daily cross-border activity.
Rationale Behind the Proposed Change
Officials said allowing higher denomination Indian notes would help reduce friction for Indian tourists, who form a significant share of visitors to Nepal. It could also simplify transactions in border areas where Indian currency is commonly used due to close economic and social ties. The move is seen as part of broader efforts to strengthen people-to-people connectivity and economic cooperation.
Safeguards and Regulatory Oversight
Nepalese authorities are expected to put safeguards in place to prevent misuse, including limits on cash holdings and enhanced monitoring to curb illegal financial flows. Any change would require formal approval and clear guidelines for banks, businesses, and law enforcement agencies.
Impact on India-Nepal Relations
The proposal reflects Nepal’s pragmatic approach to managing its economic relationship with India. If implemented, it is likely to ease travel, boost tourism, and facilitate smoother trade, especially in border regions that rely heavily on cash transactions.
