RBI Permits High-Denomination Indian Notes for India-Nepal-Bhutan Travel

India’s central bank has amended the Foreign Exchange Management (Export and import of Currency) Regulations, 2015, allowing Indian, Nepali and Bhutanese nationals to carry high-denomination Indian currency while travelling to and from India.

According to a notification published in the Gazette of India on November 28, 2025, individuals may now carry Indian notes above the INR 100 denomination up to a total limit of INR 25,000.

The facility, however, does not apply to citizens of Bangladesh and Pakistan.

India currently circulates banknotes of INR 200, INR 500 and INR 2,000 above the INR 100 denomination. The INR 2,000 note, introduced in 2016, remains legal tender but is being withdrawn from circulation.

Nepal, in December 2018, prohibited travellers and financial institutions from carrying or using Indian notes of INR 200, INR 500 and INR 2,000. Nepal Rastra Bank (NRB) issued a formal circular in January 2019 to enforce the ban.

Many Nepali traders, particularly in border regions, had criticised the restriction. They argued that it hampered cross-border trade, where Indian currency is commonly used.

Guru Prasad Paudel, spokesperson for Nepal Rastra Bank, told New Business Age that the central bank would issue a new circular soon in light of the latest changes. 

Nepali officials point out that tourists are already allowed to bring up to $5,000, or its equivalent in convertible currency, provided larger amounts are declared. They noted that the INR 25,000 limit for Indian nationals is India’s own regulation.

India has long argued that counterfeit and illegal currency enters its territory through Nepal. High-denomination Indian notes have therefore faced restrictions in Nepal for years.

Under the 2015 Foreign Exchange Management Regulations, the RBI had allowed Nepali and Bhutanese citizens to carry Indian notes of INR 500 and INR 1,000 up to INR 25,000. That arrangement, however, collapsed after India’s demonetisation of the two notes in November 2016, a move aimed at curbing black money and corruption.

Despite repeated requests from Nepali authorities, India has not yet exchanged the demonetised notes held inside Nepal’s financial system. According to spokesperson Paudel, NRB still retains roughly INR 50 million (around Rs 80 million) in invalid INR 500 and INR 1,000 notes.

Observers say the latest RBI decision could bring practical benefits if Nepal now lifts its own ban on high-denomination Indian currency. They argue that Nepali workers in India would be able to bring home their earnings more easily, and Indian tourists would also find transactions smoother.

“Thousands of Nepalis working in India will be able to carry their savings in large denominations,” said Nara Bahadur Thapa, former executive director of Nepal Rastra Bank. “Indian visitors will also benefit.”

Earlier on Octobr 1, 2025, RBI announced that Authorised Dealer (AD) banks in India and their overseas branches may be permitted to extend loans in Indian Rupees (INR) to residents of Nepal, Bhutan, and Sri Lanka — including banks in these countries — to facilitate cross-border trade transactions.