Nepal is preparing to allow the circulation of Indian currency notes above Rs 100, nearly a decade after high-denomination notes were banned in the country. This decision follows a formal go-ahead from India and is expected to significantly ease currency-related challenges for Nepali migrant workers traveling to India, as well as students, pilgrims, medical visitors, and tourists from both countries. According to Guru Prasad Poudel, spokesperson for Nepal Rastra Bank, the country is in the final stages of opening up the notes.
The move comes after the Reserve Bank of India (RBI) amended its Foreign Exchange Management (Export and Import of Currency) Regulations in November. The amendment, published in India's official Gazette on December 2, 2025, allows individuals to carry Indian currency notes of any amount in denominations up to Rs 100 to Nepal and back to India. Additionally, individuals can carry notes above Rs 100, up to a total value of Rs 25,000, in either direction. Poudel stated that this was a long-standing request from Nepal, and India responded positively.
Nepal's Cabinet had decided to ban Indian notes above Rs 100 on December 13, 2018, and Nepal Rastra Bank issued a circular on January 20, 2019, prohibiting Nepali travelers, banks, and financial institutions from holding or trading such notes. This restriction was implemented after India demonetized the 500 and 1,000 rupee notes in 2016. The ban was criticized by travel traders and business entrepreneurs, who said it would hurt the country's tourism.
Efforts have been made to ease the burden through digital methods. Since March 1, 2024, Indian tourists have been able to make payments in Nepal using QR codes via mobile apps. While this has helped in urban areas, tourism entrepreneurs say the system remains unreliable in remote trekking and adventure destinations where connectivity is poor.
The RBI's recent amendment also permits Nepali and Bhutanese currency to be carried between Nepal, Bhutan, and India without restriction, but this provision does not apply to citizens of Pakistan or Bangladesh.
Nepal Rastra Bank officials anticipate that the new RBI policy will allow both countries to carry notes under the same terms, reducing the risk of Nepali currency displacement. They also expect better financial coordination and progress on long-pending currency exchange issues. While the RBI has lifted the restriction, high-value Indian notes will not be circulated in Nepal immediately, as Nepal Rastra Bank will issue its own directive before the new arrangement takes effect.
This decision is expected to benefit Nepalis who regularly travel to India for work, treatment, or business, as well as Indian tourists visiting Nepal. The new rule simplifies travel for millions of Nepali and Indian commuters, tourists, patients, and small traders by eliminating the need for small notes and making payments and expenses easier for tourists. It also reduces informal transactions, money exchange hassles, and illegal currency trading, potentially pushing more transactions into the formal banking system.
