Don't take 1,000 and 500 Indian rupee notes to Nepal

Tourists, businessmen and officials from India visiting Nepal are facing a new problem, following the Nepal government's ban on exchange of Indian currency in the denominations of Rs 500 and Rs 1,000.

"I was shocked after a restaurant owner refused to accept Rs 500 near Raxaul town on Indo-Nepal border citing the notification," Sumit Kumar Singh, a businessman, who regularly visits Nepal, said.

"Indians visiting Nepal without such knowledge are facing a tough time, and this development is bound to badly hit the cross-border business," Singh said.

Ranjeev, an activist, who is in regular touch with his friends in Nepal, said that nationalised banks, including the Rashtriya Banijya Bank of Nepal, Everest Bank of Nepal have also stopped the transaction of these notes.

It is not only banks; all registered currency exchange counters operating along the Indo-Nepal border have also directed not to deal with these notes.

An Indian official posted in Kathmandu told rediff.com over telephone that the foreign exchange management department of Nepal Rashtra Bank had publicly displayed a notice in this regard.

"Indian currency notes in the denomination of Rs 500 and Rs 1000 are restricted in Nepal," the notice states.

The Nepal government also threatened legal action against anyone found in possession or exchanging these notes.

"Possession and exchange of these currency notes in Nepal by any person shall be punishable as per the existing law," the notice said.

However, police officials posted at the Indo-Nepal border said that the Nepal government appears to have banned the currency notes in view of the heavy inflow of counterfeit notes into its territory.