NRB: Don’t accept new Indian notesNepal Rastra Bank (NRB) has advised Nepali citizens against holding newly issued Indian banknotes of IRs500 and IRs2,000 denominations saying it is illegal to do so.
Nepal Rastra Bank (NRB) has advised Nepali citizens against holding newly issued Indian banknotes of IRs500 and IRs2,000 denominations saying it is illegal to do so.
NRB Spokesperson Narayan Prasad Poudel told the Post that the bills cannot be circulated in Nepal until the Reserve Bank of India (RBI) publishes a Foreign Exchange Management Act (FEMA) Notification allowing Nepali citizens to possess them.
“Nepali citizens are only allowed to hold IRs100 banknotes as per the existing FEMA Notification,” said Poudel. “We are yet to receive notification about the new IRs500 and IRs2,000 banknotes.”
The RBI’s previous FEMA Notification allows Nepali citizens to hold up to IRs25,000 in cash in IRs500 and IRs1,000 banknotes. The notice was issued two years ago after Indian Prime Minister Narendra Modi’s visit to Nepal.
The Indian government made the announcement following Nepal’s request to legalize their circulation in the country citing difficulties faced by Nepalis visiting India for medical treatment, education and shopping.
However, after the Indian government recently demonetized these banknotes, NRB also banned their circulation in Nepal. The Indian government has issued new IRs500 and IRs2,000 banknotes to replace the banned paper money.
NRB is unsure about the legal tender status of the new bills in Nepal. “We urge all our citizens to refrain from holding the new IRs500 and IRs2,000 banknotes as we are unsure about their status,” said Poudel. “We are not sure if the Indian government will ever allow us to hold such notes, so it would be risky for Nepali citizens to carry them.”
Indian tourists visiting Nepal might bring the new IRs500 and IRs2,000 banknotes with them, but NRB strongly advises our citizens against accepting them, Poudel added.
India generally issues a FEMA Notification allowing Nepalis and Bhutanese to carry a certain amount of Indian currency of the largest denominations.
“We will allow our citizens to carry the new bills only after the Indian government tells us it is okay to do so,” said Poudel.