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Why all Indian rupee notes are accepted in Nepal and Bhutan, except 500 Rs and 1000 Rs? Why spare those two notes?

  • 3
    Maybe too many counterfiet notes in circulation? – user13044 Aug 19 '15 at 12:59
  • Are you asking me? – Aneek Aug 19 '15 at 12:59
  • Am in doubt, so I don't know the answer – Aneek Aug 19 '15 at 13:00
  • Source for your claim that they're not accepted? Personal experience? Online information? – JonathanReez Aug 19 '15 at 13:03
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    Anyone 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 Lazarus Dec 6 '16 at 0:26
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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.

  • 2
    Oh, so it's been recent. Thanks, I didn't knew the change. – Aneek Aug 19 '15 at 13:05
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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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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.

  • Nice. But... can you perhaps include a source for your claim that both governments explicitly agreed to permit the use of these notes? – MastaBaba Aug 23 '15 at 22:57

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