Indian currency in Nepal: Ban on Indian Rs. 500 and Indian Rs. 1000 bank currency notes in Nepal

The Indian currency notes of Rs 500 and Rs 1000 are banned in Nepal. Kindly do not carry Indian Rs. 500 and Indian Rs. 1000 bank notes in Nepal. It’s applicable to both Indian and foreign nationals traveling to Nepal. In you are caught with Indian Rs. 500 or Indian Rs. 1000 notes in Nepal, the entire amount in Rs. 500 or Indian Rs. 1000, will be confiscated and you may be subjected to fine or imprisonment( up to three years) in Nepal.

All confiscated Indian currency notes of Rs 500 and Rs. 1000 are sent to Central bank of Nepal. There is an estimated Rs 500 million worth of confiscated Indian currency of Rs 500 and Rs. 1000 notes with laying useless with Central Bank of Nepal.

(Source: Central Board of Excise and Customs, Government of India)

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Here is the official text from Government of India:

Circular No. 81 /2000-Cus

dated 3-10-2000

F.NO. 552/47/2000-LC

Government of India

Ministry of Finance

Department of Revenue

Sub: Possession of Rs. 500 denomination Indian currency notes - informing Indian passengers about the prohibition

His Majesty's Government of Nepal has issued a Gazette Notification on June 26, 2000, making the possession of Rs. 500-denomination Indian currency notes in Nepal an offence under Section 5 of Foreign Exchange (Regulation) Act, 2019 (BS) (1962). According to clause (a) of the said Notification, Indian currency notes of Rs. 500-denomination are not permitted anywhere in the Kingdom of Nepal, since these are non-exchangeable. The said Notification, accordingly, prohibits the currency notes of this denomination to be either taken out or brought inside Nepal. Further, the 500-Rupee notes in possession of the defaulters are liable to be seized and a sentence of up to three years imprisonment could be awarded.

2. To ensure that Indian nationals visiting Nepal are not inconvenienced for carrying such notes inadvertently/unknowingly, it is requested that necessary action may be urgently taken to give wide publicity to the aforesaid restrictions and contents of the said Nepalese Gazette Notification prohibiting the possession of Indian currency notes of Rs. 500-denomination in Nepal.

3. You are requested to prominently display notices at the Airports and Land Customs Stations highlighting this fact and advising all travellers to Nepal regarding this new provisions of Nepalese law.