November 25th, 2016
India’s new currency notes of Rs 500 and Rs 2,000 denomination have been banned for use by the Nepal Rastra Bank. After the old Rs 500 and Rs 1,000 denomination notes were withdrawn, and new notes issued by the Reserve Bank of India, Nepal Rastra Bank has called the new currency notes “unauthorised and illegal”.
Narayan Poudel, a spokesperson of NRB said that the new currency notes are not yet valid in Nepal, as reported by Onlinekhabar.com. These notes will be valid in Nepal only when India issues a notification as per the Foreign Exchange Management Act, Mr Poudel said.
India issuing a FEMA notification will ease the minds of people in Nepal as well as India to exchange a certain amount of Indian currency. Previously, Nepal banned the use of Rs 500 and Rs 1,000 notes till 2015. The ban was lifted after Prime Minister Narendra Modi’s visit to Nepal.
Nepal allowed for people to carry Indian currency of higher denomination of up to Rs 25,000. RBI formed a panel to ease the process of currency exchange for non-Indians with devalued notes, living in Nepal.