In a major policy shift that will ease cross-border travel and strengthen India-Nepal economic ties, Nepal has announced plans to allow circulation of Indian currency notes above ₹100, a restriction that had been in place for nearly a decade. The move comes after a recent regulatory amendment by the Reserve Bank of India (RBI) allowing greater flexibility in carrying Indian currency across the border.
📌 What Changed: RBI Rule Update and Nepal’s Response
Under the RBI’s revised rules, published in India’s official Gazette on 2 December 2025, individuals can now carry Indian currency notes of any denomination up to ₹100 without restrictions and high-denomination notes above ₹100 up to a total value of ₹25,000 in either direction between India and Nepal. This change was previously not permitted and had forced travellers to rely on low-value notes or frequent currency exchanges.
In response, the Nepal Rastra Bank (NRB) and the government of Nepal are preparing to officially lift the ban on high-value Indian rupee notes, re-introducing them into circulation. Official notices are being drafted for publication in the Nepal Gazette, after which banks and financial institutions will be directed to accept the higher-denomination Indian rupee notes
📊 Background: Why Was There a Ban?
After India’s 2016 demonetisation of ₹500 and ₹1,000 notes, Nepal restricted the circulation of Indian notes above ₹100, citing security concerns and the potential influx of counterfeit currency. This policy remained in place for nearly ten years, complicating financial transactions for travellers and businesses operating across the India-Nepal border.
💼 Who Benefits from the New Policy?
The decision is expected to significantly improve ease of travel and commerce, especially for:
- Indian tourists visiting Nepal for leisure or pilgrimage trips.
- Nepali workers and students travelling to India for work or education.
- Remittances and border trade, where cash transactions are still prevalent in remote areas.
- Local tourism and hospitality sectors, including hotels, restaurants, and casinos that cater to Indian guests
Before this change, reliance on small denominations or digital payments created hurdles, particularly in regions with poor mobile connectivity. The return of familiarity through high-denomination cash is expected to fill that gap.
📈 Economic Impact and Bilateral Relations
Economists and industry stakeholders view this policy shift as a boost to bilateral cooperation between India and Nepal. Easing currency restrictions may:
- Boost tourism flows by reducing the need for frequent currency exchanges.
- Simplify remittance and daily transactions near and across the border.
- Encourage cross-border business activity, especially in trade and service sectors.
Allowing Indian currency above ₹100 is also seen as a goodwill gesture that strengthens economic ties and mutual trust between the two neighboring countries.
📌 Looking Forward
While the official effective date has yet to be published, authorities in Nepal are moving swiftly to formalize the new rules. Once implemented, the circulation of Indian notes above ₹100 will be a landmark change in Nepal’s monetary policy toward India, benefiting millions of travellers and boosting economic engagement at the grassroots level.
