Nepalis can exchange demonetised Indian notes up to ₹4,500

A Nepalese national, who possesses demonetised Indian banknotes of ₹500 and ₹1,000 denominations can exchange up to ₹4,500, the RBI has told Nepal's central bank, official sources said in Kathmandu on March 27. The Nepal Rastra Bank is pressing for this limit to be ₹25,000 per individual.

During a meeting held on March 26 with the Nepal Rastra Bank (NRB) officials, the Indian team offered exchange facility via formal banking channel for up to ₹4,500 per person in demonetised banknotes.

The RBI officials have proposed that individuals possessing banned Indian bank bills will have to open account at banks and financial institutions and deposit the Indian currency before the NRB sends it to the RBI for verification. After verification, the RBI would send back the equivalent currency in other denominations, the sources said.

The NRB officials have agreed over the modalities presented by the RBI, but they did not agree on the amount up to which exchange facility is given.

Bhishma Raj Dhungana, head of foreign exchange department at NRB said, "We asked them to provide exchange facility for up to ₹25,000 in the banned denominations. He further argued that it was the Indian government's decision to allow Nepalis to hold up to ₹25,000, hence they should provide exchange facility up to that limit.

Nepal's central bank has been claiming that its financial system has accumulated ₹33.6 million at various banks and financial institutions.

Soon after the November 8 decision by the Indian government, Nepalese Prime Minister Prachanda had a telephonic talk with Prime Minister Narendra Modi to seek exchange facility for demonetised Indian currencies in circulation in Nepal.