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Both the governments(Nepal and India) have agreed to permit the use of INR500 and INR1000 notes. So it is totally legal to carry INR500, INR1000 notes to Nepal if you are going to Nepal.


As Mark Mayo's answer states, these two denominations were "banned" (either officially or unofficially) in the two countries due to issues with counterfeit notes. Other denominations were not banned since most fraud on high value items / purchases would involve these two denominations. While a lot of travel websites and guides state these are still banned, ...


India had tried to curb unauthorized trading between these countries by requesting they ban them. However, as of 2013, Nepal and India have agreed to allow 500, 1000 notes again. The Bhutan Monetary Authority also banned it for similar reasons. However, as of January 2015, the RBI has also allowed travelers to take these notes to Bhutan. So yes, that ...

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