Why all Indian rupee notes are accepted in Nepal and Bhutan, except 500 Rs and 1000 Rs? Why spare those two notes?
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3Maybe too many counterfiet notes in circulation?– user13044Aug 19, 2015 at 12:59
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Are you asking me?– AneekAug 19, 2015 at 12:59
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Am in doubt, so I don't know the answer– AneekAug 19, 2015 at 13:00
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Source for your claim that they're not accepted? Personal experience? Online information?– JonathanReez ♦Aug 19, 2015 at 13:03
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1Anyone coming here by random search: the 500 and 1000 rupee notes have been demonetized in India, so the question of using them in Nepal and Bhutan is moot. There is a new 500 rupee note. The 1000 is replaced by a 2000. Perhaps someone else can fill in the permanent rules for Nepal and Bhutan, once the new notes are in wide circulation.– Andrew LazarusDec 6, 2016 at 0:26
3 Answers
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 used to be the law, and it was to curb unauthorised trading, but that ban has now been lifted officially.
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2
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, this is old advice. In practice, trading in these two denominations never really stopped. As of 2015, even government shops and agencies in Bhutan accept Rs 500 and 1000, for instance.
Having said that, there are very strict controls on export and import of Indian currency by non-Indian nationals (excluding those of a neighbouring SAARC countries). So you may find, depending on your nationality, that the point on whether those denominations are accepted is moot because you're not allowed to take Indian rupees anyway.
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Related: Is it really forbidden to cross the Indian border with Indian rupees? Aug 21, 2015 at 8:47
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1"very strict controls" -- in theory, yes, but in practice, these are not enforced (= you're not going to have Customs going through your wallet). Standard disclaimers apply, and if you do get caught, you run the risk of losing the currency. Aug 21, 2015 at 10:34
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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.
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Nice. But... can you perhaps include a source for your claim that both governments explicitly agreed to permit the use of these notes? Aug 23, 2015 at 22:57