Currency Law in Nepal 2082/83 (2026)

Currency law in Nepal is built mainly on the Nepal Rastra Bank Act 2058 and the Foreign Exchange (Regulation) Act 2019. Nepal Rastra Bank issues Nepalese currency, while foreign-exchange dealings, travel forex and Indian notes follow controls that may change. Counterfeiting is separately punished under the National Penal Code 2074. See also our guide to cryptocurrency and Bitcoin law in Nepal.

Key Takeaways

Nepal Rastra Bank controls currency issuance and foreign-exchange administration. The Rupee is legal tender, the Nepalese Rupee has a fixed relationship with the Indian Rupee, and counterfeiting can create criminal liability. Travel limits and Indian-note rules changed in 2025, so you should verify current operational rules before travelling or transferring funds.

• Nepal Rastra Bank has the sole right to issue Nepalese banknotes and coins under Section 52 of the Nepal Rastra Bank Act 2058.
• Section 51 recognises the Rupee as Nepal’s monetary unit and legal tender guaranteed by the Government.
• The Foreign Exchange (Regulation) Act 2019 controls foreign-currency holding, dealing and transfer.
• The NPR-INR peg is stated as 1 INR = NPR 1.60, or NPR 160 for INR 100.
• Genuine damaged notes may be exchanged by Nepal Rastra Bank without a charge, subject to the applicable process.
• Counterfeiting, knowingly using fake notes and defacing notes are separate offences under the National Penal Code 2074.
• The 2025 changes to the travel foreign-exchange facility and Indian-note rules mean older figures should not be relied on.

What is currency law in Nepal?

Currency law in Nepal combines rules on domestic money, foreign exchange and criminal conduct. The Nepal Rastra Bank Act 2058 governs the Rupee, banknotes, coins and Nepal Rastra Bank’s monetary role. The Foreign Exchange (Regulation) Act 2019 governs foreign currency. The National Penal Code 2074 addresses counterfeiting and related conduct.

These laws do different work. A person asking whether Nepal Rastra Bank can issue a note is dealing with the NRB Act. A business receiving money from abroad, operating a foreign-currency account or arranging an international transfer may also need to consider the Foreign Exchange (Regulation) Act.

A person accused of making a fake note, knowingly using one or damaging currency may face a criminal case under the Penal Code. The legal question is not only what the money looks like. It may also concern the person’s knowledge, the transaction and the route through which the money was obtained.

For current foreign-exchange administration, the Nepal Rastra Bank website is a relevant official reference. The Nepal Law Commission also provides access to the statutory texts through its government portal. Current circulars and operational directions should be verified with the receiving bank, licensed dealer or NRB before action.

Who can issue currency in Nepal?

Nepal Rastra Bank alone may issue Nepalese banknotes and coins under Section 52 of the Nepal Rastra Bank Act 2058. Section 51 establishes the Rupee as Nepal’s monetary unit and legal tender guaranteed by the Government. Denominations and designs require the approval described in the Act, and reproducing currency requires the Bank’s written authorisation.

This issuing power matters because ordinary commercial businesses cannot create official Nepalese currency. A bank may handle payments, deposits and foreign exchange within the applicable framework, but that does not make it an issuer of Nepalese legal tender.

The issuing monopoly also matters for reproductions. A printed image, sample, advertisement or other reproduction should not be treated as harmless merely because it is not intended to circulate. The current article’s verified legal position is that reproduction requires written authorisation from Nepal Rastra Bank. If your proposed use involves a banknote image, verify the permission route with NRB first.

The Rupee is divided into 100 paisa under the current article’s stated Section 51 position. The practical point is simple: Nepalese Rupee notes and coins derive their official status from the statutory framework, not from private printing or an informal agreement.

How does the NPR-INR peg work?

The NPR-INR peg is stated as 1 INR = NPR 1.60, equivalent to NPR 160 for INR 100. Nepal Rastra Bank maintains this fixed relationship with the Indian Rupee. Rates for other currencies are not the same fixed peg; they move in relation to the wider foreign-exchange system and the Indian Rupee.

A peg is a fixed exchange relationship between two currencies. It does not mean every foreign currency has a fixed rate against the Nepalese Rupee. A person converting US dollars, euros or another currency will encounter the applicable rate under the foreign-exchange system at the time of conversion.

The peg is relevant to trade, travel, remittances and border transactions. It does not remove the need to comply with foreign-exchange controls. A person cannot rely on the peg alone to decide whether a currency may be held, carried, transferred or exchanged in a particular way.

Do not confuse the peg with a promise that every private exchange will produce the same practical result. Banks and licensed money changers operate within the applicable framework. If a transaction involves a business account, remittance, foreign-currency account or cross-border payment, obtain the current operational position before proceeding.

What does the Foreign Exchange (Regulation) Act 2019 control?

The Foreign Exchange (Regulation) Act 2019 controls foreign-currency dealing, holding and transfer in Nepal. Nepal Rastra Bank administers the foreign-exchange system, licenses banks, money changers and remittance companies, and sets the applicable exchange-rate and approval framework. Sections 6–7, Section 16 and Section 17 address important compliance consequences.

Section 6 and Section 7 are identified in the current legal material as covering surrender and non-forgoing duties. In practical terms, the foreign-exchange law can require foreign exchange to be brought into, surrendered to or dealt with through the banking system in the circumstances set by law.

Section 16 concerns approval for foreign-currency accounts. That does not mean every person or business can open and operate such an account without checking the approval position. The account type, holder and transaction may matter. Verify the current requirement with NRB or the relevant bank.

The Act also regulates foreign exchange through licensed channels. The current article identifies banks, money changers and remittance companies as licensed participants. An informal transfer commonly described as hundi may create foreign-exchange risk because the law does not treat every private arrangement as an authorised transaction.

Section 17 provides for forfeiture and a fine for breach. The current article states that illegal foreign-exchange dealing may lead to forfeiture of the foreign exchange involved and a fine of up to three times that amount. The exact application depends on the facts and the applicable provision, so a person facing an allegation should obtain legal advice promptly.

How much foreign currency can you carry from Nepal?

People travelling abroad may obtain a limited foreign-exchange facility against a passport, but the exact current limit is not safely stated here. The facility was revised upward in 2025. Monetary policy, NRB directions and customs rules may affect the operational position, so verify the per-passport limit and any declaration threshold before departure.

Older articles often present one fixed number as if it will remain valid. That is unsafe for this topic. The current material specifically records a 2025 change to the travel foreign-exchange facility and warns that older figures are out of date. This article therefore does not replace the current NRB or bank position with an unverified number.

The same caution applies to declarations. The fact that a traveller may obtain foreign currency through a permitted facility does not answer every question about carrying, declaring, retaining or using it. Border procedures and financial rules may address different parts of the journey.

1. Identify the destination, purpose of travel and currency involved.
2. Ask the relevant bank or authorised foreign-exchange provider for the current passport-based facility.
3. Confirm whether the transaction requires any approval, declaration or supporting information.
4. Keep the transaction record and verify the current position again if the travel date changes.
5. If the amount, source of funds or purpose is unusual, obtain advice before carrying or transferring the money.

These steps are a compliance checklist, not a promise that a bank or authority will approve a particular transaction. The receiving institution can apply the current rule and may require further clarification.

Can you carry Indian currency in and out of Nepal?

Indian-currency carrying rules changed in 2025, including the treatment of Indian Rs 200 and Rs 500 notes. The current material does not establish a safe permanent amount for this article. Before crossing the border, verify the permitted denominations, per-person limit and effective operational guidance with Nepal Rastra Bank or the relevant authorised channel.

This is the point at which many older search results become unreliable. Earlier restrictions on higher-value Indian notes were followed by a 2025 decision described in the current material as allowing Rs 200 and Rs 500 notes up to a per-person limit, subject to official implementation.

The existence of that decision does not allow a traveller to assume that every denomination, amount or route is permitted. The rule may depend on the current gazette, NRB guidance and border implementation. Carrying Indian currency across the border without checking those details can create avoidable difficulty.

If you are a business receiving Indian currency, the issue may extend beyond personal travel. The purpose of the payment, the way it is recorded, and whether it is exchanged through an authorised channel can matter. A company should not treat a border-currency rule as a general licence for private foreign-exchange dealing.

What are the counterfeit currency offences in Nepal?

Counterfeiting currency is a criminal offence under Section 256 of the National Penal Code 2074, with the current article stating five to ten years’ imprisonment and a fine of NPR 50,000 to NPR 100,000. Section 257 addresses knowingly using counterfeit currency, while Section 263 addresses defacing or destroying notes.

The offence of using a fake note is not the same as accidentally receiving one. Knowledge and the surrounding facts can be important. If you suspect a note is counterfeit, do not knowingly pass it to another person. Preserve the relevant transaction information and seek guidance from the bank or authority handling the note.

Defacing is also distinct from counterfeiting. Writing on, damaging or destroying a genuine note may raise a different issue from making a false note. The penalty depends on the offence charged and the statutory provision applied.

What should you do if you receive a damaged or suspicious note?

Genuine damaged notes may be exchanged through Nepal Rastra Bank under Section 56 of the Nepal Rastra Bank Act 2058, while suspicious or counterfeit notes should not be knowingly circulated. A damaged note and a fake note raise different legal questions. Keep the note and transaction context, then ask the relevant bank or authority how to proceed.

The current article states that Nepal Rastra Bank provides free exchange for genuine damaged notes. That does not mean every note will be accepted without examination. The condition of the note and the applicable exchange process may be assessed by the institution receiving it.

Do not attempt to repair, alter or pass on a note you believe is counterfeit. If a shop, bank or other person tells you that a note is suspicious, ask what official channel should receive it. Avoid making admissions or signing a statement about an alleged offence without understanding the document.

A genuine note can be torn, worn or marked without being counterfeit. Conversely, a note that looks unusual may require examination. The safest response depends on the facts, so avoid treating an internet image or informal opinion as a conclusive authenticity test.

What are the practical risks for businesses and travellers?

Businesses and travellers face risk when they rely on outdated currency limits, use unauthorised foreign-exchange channels, operate a foreign-currency account without checking approval, or knowingly circulate a suspicious note. The legal consequences can include forfeiture, fines or criminal proceedings. The current rule should be confirmed before a material transaction or border crossing.

A business receiving overseas payment should identify the currency, payment route and receiving account. The fact that a payment is commercially genuine does not itself answer whether the foreign-exchange route is authorised. The Foreign Exchange (Regulation) Act 2019 may apply to the receipt, conversion, account and transfer.

A traveller should separate three questions: how much foreign currency may be obtained, how much may be carried, and what must be declared. These questions should not be collapsed into one number copied from an older article.

An illustrative scenario shows the difference. A Nepal-based trader receives payment in a foreign currency through an informal arrangement and later asks a friend to carry Indian notes across the border. The trader may face separate foreign-exchange and carrying-rule questions. The example does not predict an outcome or establish a document requirement; the current facts and applicable directions would need review.

What mistakes should you avoid under currency law in Nepal?

The most common legal mistakes are treating old travel limits as current, confusing the NPR-INR peg with permission to carry any amount, using informal foreign-exchange channels, and passing a note after learning it may be counterfeit. Check the current rule with NRB or an authorised provider before relying on a number or transaction method.

• Using an old figure: the travel forex facility and Indian-note rule changed in 2025.
• Confusing exchange rate with authorisation: the NPR-INR peg does not decide whether a transfer or carrying method is lawful.
• Ignoring the account issue: Section 16 concerns approval for foreign-currency accounts.
• Using hundi or another informal route: foreign exchange involved in a breach may be forfeited, with a fine of up to three times the amount under the stated Section 17 position.
• Passing a suspicious note onward: knowingly using counterfeit currency can trigger Section 257.
• Assuming every damaged note is fake: genuine damaged notes and counterfeit notes follow different legal routes.

Keep written transaction records and ask precise questions. Identify whether you need a travel facility, a foreign-currency account, a remittance, a conversion or advice about a suspected offence. The answer may differ for each.

When should you speak with a lawyer about currency law?

You should seek legal advice when a foreign-exchange transaction, remittance structure, foreign-currency account, Indian-note issue or counterfeit allegation could affect your rights. A lawyer can assess the facts, identify the relevant Act and section, and help you communicate with the authority or respond to a criminal or regulatory allegation.

Legal advice is particularly useful after money has been seized, an account has been questioned, a suspicious note has been identified, or a person has been asked to explain an informal transfer. Do not assume that returning the money resolves a possible offence.

Alpine Law Associates advises and represents clients in civil, business and criminal matters. Our team can help you assess a currency or foreign-exchange issue and route the matter appropriately. We cannot promise that Nepal Rastra Bank, a bank, a money changer, customs authority or court will approve a transaction or reach a particular result.

For a business, advice may include reviewing the proposed payment structure and the foreign-exchange questions it creates. For a traveller, it may involve checking the current rule before departure. For an accused person, it may involve protecting legal rights during investigation or proceedings. The work depends on the facts and the current official position.

What are the alternatives and edge cases?

The correct legal route may differ for domestic currency, foreign currency, Indian notes, damaged notes and suspected counterfeits. A bank transaction, licensed money changer, remittance arrangement and criminal allegation are not interchangeable. If the facts involve more than one category, address each applicable statute and verify current directions with the relevant office.

Some situations sit between categories. A person may hold a genuine damaged foreign note, a business may receive convertible currency from abroad, or a traveller may carry Indian notes after obtaining foreign exchange through an authorised provider. The answer cannot be inferred solely from the currency’s appearance or the exchange rate.

Non-Resident Nepalis and foreign nationals may also need to explain the purpose and route of a transaction in a way that differs from an ordinary domestic payment. The supplied material does not establish a separate universal rule for every NRN or foreign-national transaction. Verify the current requirement with NRB, the bank or the relevant office.

The safest alternative to an informal arrangement is to ask an authorised provider whether it can handle the transaction under the current rules. If the provider cannot explain the route, pause before transferring funds or carrying currency. Where an allegation has already arisen, obtain advice rather than trying to solve the issue through another private transfer.

What is the short answer on currency law in Nepal?

Currency law in Nepal gives Nepal Rastra Bank the exclusive issuing role and places foreign-exchange dealings under statutory control. The NPR-INR peg is 1 INR = NPR 1.60. Travel forex and Indian-note rules changed in 2025. Counterfeiting, knowingly using fake notes and defacing notes may create separate Penal Code offences.

• Read the NRB Act for Nepalese currency issuance and damaged-note rules.
• Read the Foreign Exchange (Regulation) Act for foreign-currency dealings, accounts and sanctions.
• Read the National Penal Code 2074 for counterfeiting, fake-note use and defacing offences.
• Verify current limits and border rules instead of relying on older online figures.
• Get advice promptly if money, an account, a note or a person has been seized or investigated.

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This article is general information, not legal advice. If you need help with a foreign-exchange transaction, suspected counterfeit currency, an Indian-note issue or a regulatory allegation, contact Alpine Law Associates and ask about our criminal case litigation services in Nepal.