Thursday, January 22, 2015

India lifts ban on high value IC notes with cap but it takes time to come into effect in Nepal

The Reserve Bank of India – the central bank of India – today allowed Indians to carry high value denomination notes while travelling to Nepal and Bhutan with a cap of Rs 25,000 on the total amount. Though, India has lifted the ban, Nepal is yet to formally revoke the legal restriction to come into effect in Nepal.
The necessary amendments have been carried out in the regulations to permit this, the Reserve Bank of India (RBI) said in a statement.
However, the central bank will request the government to publish a notice in Nepal Gazette – that has earlier on June 26, 2000 published notice banning the 500 and 1,000 Indian currency notes in Nepal – before the high value denomination Indian currency notes are allowed into Nepal, said executive director of Foreign Exchange Management Department of Nepal Rastra Bank Bhisma Raj Dhungana. "We will request the government next week to cancel the earlier notice," he added.
Indian citizens can travel to Nepal with Rs 500 and Rs 1,000 denomination notes as well after the government publishes a notice in Nepal Gazette allowing it into Nepal.
Following the request from Indian government to curb the smuggling of counterfeit currency, the government had imposed ban on carrying 500 and 1,000 denomination Indian currency notes in Nepal in 2000.
According to Foreign Exchange Act, a person possessing Indian currency notes of 500 and 1,000 denomination can be imprisoned two years, the police will seize the currency and in addition to fine of equal amount.
Nepal had been long requesting India to lift the ban as it has created inconvenience to Nepalis workers in India and Indian tourists travelling to Nepal. They were only allowed to carry Indian currency notes of Rs 100 denomination, but there was no limit on the amount.
Indian Prime Minister Narendra Modi, while inaugurating National Trauma Centre of Bir Hospital in November 2014, had announced to allow high value Indian currency notes to allow in Nepal.