In a major policy shift, Nepal is set to lift the long-standing ban on Indian currency notes above ₹100, paving the way for smoother travel, trade, and remittance transactions between the two neighbouring countries. The decision follows a key amendment made by the Reserve Bank of India (RBI) to India’s Foreign Exchange Regulations, allowing the carriage of higher-denomination notes across borders.
The Nepal Rastra Bank (NRB), the country’s central bank, confirmed that it is in the final stages of issuing an official notification, after which circulars will be sent to commercial banks and financial institutions to implement the revised rules.
“We are in the final stage,” said Guru Prasad Poudel, spokesperson for the NRB. “The notification will be published in the Nepal Gazette, followed by official circulars to financial institutions. The effective date will be announced soon.”
Regulatory Change by RBI Sets the Stage
The RBI’s amendment, dated November 28, 2025, and published in India’s official gazette on December 2, has made the new policy possible. Under the revised norms, individuals may now carry Indian currency notes of up to ₹100 in any quantity, and notes above ₹100 up to a total value of ₹25,000 while travelling between India and Nepal.
This marks a major step toward facilitating cross-border movement, tourism, and remittance flows between the two nations.
Nepal had originally banned the use of Indian notes of ₹500, ₹1,000, and later ₹2,000 in the aftermath of India’s 2016 demonetisation, citing concerns over counterfeit notes and security risks. The restriction, in effect for nearly ten years, had caused persistent inconvenience to travellers and traders.
Relief for Travellers, Workers, and Businesses
The new rule is expected to bring significant relief to travellers, traders, and migrant workers who move frequently between India and Nepal. Millions of Nepali citizens travel to India each year for work, education, healthcare, and pilgrimage — activities that have long been complicated by cash restrictions.
“This was our long-standing request, and India responded positively,” Poudel added. “Many Nepalis working or studying in India were facing difficulties due to the limitation on higher denomination notes.”
Economists and tourism industry experts believe the decision will revitalize tourism and border trade, particularly in popular cities such as Janakpur, Pokhara, Butwal, Lumbini, and Birgunj, where Indian visitors and cross-border businesses play a vital role in the local economy.
Cash Still Crucial Despite Digital Push
While Nepal has expanded QR-code and digital payment systems in recent years, many rural and hilly regions continue to depend heavily on cash due to poor internet connectivity and infrastructure challenges.
Tourism and hospitality businesses have welcomed the move, noting that physical cash remains indispensable for smooth transactions in remote areas. The availability of Indian currency will help travellers and local merchants alike.
For decades, Indian rupees have been widely used in Nepal’s border towns, temples, and small markets. The ban on higher denominations had severely disrupted small-scale commerce. The lifting of restrictions is expected to restore normal trade activity and strengthen grassroots economic interaction across the border.
Boost to Remittances and Cross-Border Trade
The new policy is also likely to streamline remittance flows from India to Nepal, benefiting thousands of Nepali migrant workers employed in India who send money home regularly.
Additionally, analysts expect the change to improve retail trade, logistics, and supply chain operations between the two countries, reducing reliance on currency exchange intermediaries.
Financial experts in Kathmandu have described the decision as a landmark step toward financial integration and trust-building between India and Nepal.
Nearly ten years after the ban, the reintroduction of Indian notes above ₹100 marks a turning point in bilateral monetary cooperation. The move signifies not just a currency policy shift but also a renewed phase of trust and economic partnership between the two neighbours.
By facilitating tourism, cross-border trade, and remittances, the decision is poised to strengthen socio-economic ties and inject new dynamism into the region’s border economies.
