The Nepal Government has banned use of Indian currency notes of high denomination including Rs 200, Rs 500 and Rs 2000.
The move is likely to affect the Indian tourists visiting the neighbouring country.
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Travellers typically carry Indian currency as it is extensively used by Nepalese people and businesses for their savings and transactions.
The Nepalese Government has asked the people to refrain from keeping or carrying Indian bank notes higher than Rs 100 denomination as it has not legalised those notes, Nepal’s Minister for Information and Communications Gokul Prasad Baskota said.
Apart from the impact on Indian tourists visiting Nepal, the decision of the Nepalese Government to ban Indian currency notes above Rs 100 will also affect Nepalese labourers working in India.
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Indian currency notes of Rs 500 and Rs 1000 were not easily accepted in Nepal even before the demonetization exercise of 2016.
A TOI report, published on Friday, quoted sources as saying: “Among other reasons (for the move), there was an old advice from India in this regard as a large number of fake currency in these denominations was found there. It was among the places from where wrong elements would try to bring in fake notes of Rs 500 and Rs 1,000 to India.”
Sources added that Nepalese citizens working in India will now have to send money home electronically and those sending physical currency will need to do so in notes of up to Rs 100.
India is Nepal’s largest trade partner and supplies the majority of its consumer goods.
The Indian Government introduced new banknotes of Rs 2,000, Rs 500 and Rs 200 denominations after the demonetisation of old notes worth Rs 500 and 1,000 in 2016.
However, the move hit countries such as Nepal and Bhutan where Indian currency is widely used.
Nepal Prime Minister KP Sharma Oli said earlier this year that demonetisation hurt the Nepalese people and added that he would raise the matter with Indian leaders.
People have been using the new Indian currency in Nepal for nearly two years now.