Reserve Bank of India (RBI) has lifted a ban on carrying Indian bank notes of Rs 1,000 and 500 denominations to and from Nepal.
Issuing a circular on Thursday, RBI — the central regulatory bank of India — eased the restriction on export and import of bank notes of 1,000 and 500 denominations for Nepal and Bhutan that it had imposed since May, 2000. The Indian central bank, however, has put a limit of carrying such notes at IRs 25,000 per person.
Following the request of Indian government to curb smuggling of counterfeit currency, Nepal had also imposed a ban on carrying 500 and 1,000 denominated Indian bank notes in Nepal. The restriction on carrying high denomination bank notes to and from India had created inconvenience to a large number of Nepali workers in India to remit their hard-earned money to Nepal.
Government officials say lifting of the ban will provide a great relief to Nepali workers as well as Indian tourists travelling to Nepal. “We had been asking the Indian side to relax the provision since long. The decision to lift the restriction will help a large number of Nepali workers who return to their country with their hard-earned money,” Bhisma Raj Dhungana, acting executive director at Foreign Exchange Management Department of Nepal Rastra Bank (NRB), told Republica.
In many cases, returnee workers were convicted in Nepal in charge of possession of Indian bank notes of higher denominations due to lack of awareness about such restrictions.
According to Foreign Exchange Act, a person possessing such notes can face imprisonment of two years, seizure of such notes in addition to equal amount of fine.
Though India has lifted the ban, Nepal is yet to formally revoke the legal restriction. According to officials, the government has to remove the legal ban by publishing a notice in the Nepal Gazette.
A senior official of NRB told Republica that the government could become ´liberal´ to those coming to Nepal with the possession of such notes until the ban is formally revoked. “The process to lift the ban will begin soon and will likely to be completed within a week,” the official added.