KATHMANDU: Nepal Rastra Bank has banned the use of Indian currency notes of Rs 2,000, Rs 500 and Rs 200 denominations.
Nepali travelers, banks and financial institutions are prohibited from holding or carrying and trading Indian bank notes higher than Rs 100, said the central bank issuing a circular on Sunday.
Under the new regulation, Nepali citizens cannot carry these denominations to countries other than India. Similarly, Nepalis are also not allowed to bring such notes from other countries. Indian notes of 100 or below, however, are allowed for trading and conversion, the bank’s circular reads.
On December 13, the cabinet had decided to publish the notification in the Nepal Gazette not to allow people to carry Indian currency notes above 100 denominations in Nepal.
The ban has been criticized by travel traders and entrepreneurs, saying that it would hurt the country’s burgeoning tourism at a time when the government has announced ‘Visit Nepal’ campaign with an objective to draw at least 2 million tourists in 2020.
Since a majority of Indians come to Nepal over land from bordering towns, it is difficult for them to convert their currency to dollar or Euro, they said.
According to the overland Indian visitors’ survey, 1.2 million Indians came to Nepal through the surface route while 160,132 travelled via air. The average length of stay of Indian tourists coming overland was 5.8 days. Average expenditure per visitor was as much as Rs 11,310.
The Indian government introduced new banknotes of Rs 2,000, Rs 500 and Rs 200 denominations after the demonetization of old notes worth Rs 500 and 1,000 in 2016.
However, the move hit countries such as Nepal and Bhutan where Indian currency is widely used.