Nepal's Council of Ministers has decided to lift the ban on high-denomination Indian currency notes of Rs 200 and Rs 500, a government spokesperson confirmed to ANI.

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New Currency Regulations and Cap

Minister for Information Technology and Communication Jagdish Kharel, who is also the government spokesperson, said the Cabinet meeting held on Monday decided to allow the import and export of Rs 200 and Rs 500 denomination Indian notes. "But the cap remains up to Rs 25,000 to be carried between India and Nepal," Kharel told ANI over the phone.

Further elaborating, Kharel said, "The provision has been made for Nepalese or Indian citizens to bring Rs 25,000 per person from India to Nepal and take the same amount from Nepal to India. With the government lifting the ban on high-denomination Indian notes, those notes issued after November 9, 2016, can be brought into circulation."

Background and Reasons for Lifting Ban

India had demonetised high-denomination currency notes in 2016, following which the import and export of such notes from Nepal was banned.

Earlier, India's central bank, the Reserve Bank of India (RBI), had made arrangements to allow the import and export of high-denomination Indian notes to Nepal. After India eased restrictions, the Nepal government also lifted its ban.

The RBI had amended the Foreign Exchange Management Regulations, 2015, to permit the import and export of high-denomination Indian notes between Nepal and India. Following India's demonetisation move in 2016, large-denomination Indian currency notes were not exchanged in Nepal. As a result, Nepal also imposed restrictions on the circulation of Indian currency notes of denominations higher than Rs 100. The Nepal government has now lifted the ban, taking into account the open border between the two countries and Nepal's trade dependence on India.

Lingering Issue of Old Currency

At the time of demonetisation, around Rs 50 million worth of Indian currency was present in Nepal's banking system, which is yet to be exchanged. (ANI)