Nepal’s central bank asked RBI to declare new Indian currency notes legal in a written plea

Nepal’s central bank asked RBI to declare new Indian currency notes legal in a written plea

Nepal’s central bank asked RBI to declare new Indian currency notes legal in a written plea

The Nepal Rastra Bank (NRB), the Nepal’s central monetary authority, has written a letter to the Reserve Bank of India (RBI) to legalize Indian currency notes of denominations higher than Rs 100 in Nepal.

The NRB has asked the India’s central bank to issue a notification under the Foreign Exchange Management Act (FEMA), which will make Indian bank notes of denomination more than Rs 100 legal tender in Nepal and to provide the exchange facilities to get bills of such denominations.

Before the demonetisation of Rs 500 and Rs 1,000 bank notes in November 2016, the RBI had issued a FEMA notification allowing Nepali citizens to carry Rs 25,000 worth of such bank notes.

After the demonetisation of Rs 500 and Rs 1,000 Indian currency notes, circulation of new bank notes of denominations Rs 200, Rs 500 and Rs 2,000 was started by the Indian government but they were not legalized in Nepal which led to the government of Nepal to ban usage of notes of higher denominations.