Currency Law in Nepal 2082/83 (2026)

The Nepali Rupee is pegged to the Indian Rupee at a fixed rate of 1 INR = NPR 1.60 (NPR 160 = INR 100), maintained by Nepal Rastra Bank.

Yes. Counterfeiting currency is punishable with 5 to 10 years' imprisonment and a fine under Section 256 of the National Penal Code 2074.

Two statutes form the backbone. The Nepal Rastra Bank Act 2058 makes the Rupee the monetary unit and gives NRB the sole right to issue notes and coins, while the Foreign Exchange (Regulation) Act 2019 controls dealing in, holding and transferring foreign currency. Counterfeiting and defacing currency are punished as crimes under the National Penal Code 2074, and NRB administers the foreign-exchange system day to day.

The Rupee is the monetary unit of Nepal and is divided into 100 paisa, as set out in Section 51 of the Nepal Rastra Bank Act 2058. The Rupee is legal tender, and the Government of Nepal guarantees it. Banknotes and coins issued by Nepal Rastra Bank are acceptable at face value for all public and private payments, which is what gives the currency its legal force in everyday transactions.

Yes. Under the NRB Act 2058, Nepal Rastra Bank exchanges genuine damaged or soiled notes and coins for equal value without charging a fee. However, the Bank may refuse to replace notes that are torn, defaced or destroyed beyond a certain extent, and it can forfeit counterfeit or deliberately altered notes without compensation. So an ordinary worn note can be exchanged, but a note that has been heavily damaged or tampered with may not qualify.

Foreign exchange is controlled under the Foreign Exchange (Regulation) Act 2019, administered by Nepal Rastra Bank. NRB licenses banks, money changers and remittance companies to deal in foreign currency, payments from abroad must generally be received in convertible currency, and the law lets the Government require holders to sell foreign exchange to the banking system. Opening and operating foreign-currency accounts needs NRB approval, and breaches can lead to forfeiture and fines.

Individuals can buy a limited amount of foreign currency against their passport for travel, and that facility was revised upward in 2025, so figures in older articles are out of date. Because the travel facility and any customs-declaration threshold change with each year's monetary policy and NRB circulars, confirm the current per-passport limit with Nepal Rastra Bank or your bank before travelling rather than relying on a fixed number you read online.

The rule changed in 2025. Nepal had long restricted high-value Indian notes, but a late-2025 government decision moved to allow Indian Rs 200 and Rs 500 notes to be carried up to a per-person limit, taking effect through the official gazette and NRB guidelines. Because it is recent and operationalised through NRB rules, confirm the current permitted denominations and amount with Nepal Rastra Bank before carrying Indian currency across the border.

Yes. Dealing in foreign exchange requires a licence from Nepal Rastra Bank, and informal foreign-exchange transfers such as hundi are offences under the Foreign Exchange (Regulation) Act 2019. Where an offence is established, the foreign exchange involved can be forfeited and a fine of up to three times the amount imposed. So buying, selling or transferring foreign currency should go through licensed banks and money changers, not informal channels.

Counterfeiting currency is a serious crime under Section 256 of the National Penal Code 2074, punishable with five to ten years' imprisonment and a fine. Knowingly using counterfeit currency is a separate offence under Section 257 with its own imprisonment and fine, and defacing or destroying notes is punishable under Section 263. The prohibition on reproducing currency is in the NRB Act 2058, but the criminal punishment is in the Penal Code.

The NRB Act 2058 prohibits reproducing or counterfeiting currency and requires the Bank's written authorisation for any reproduction, but the criminal punishment for counterfeiting is set in the National Penal Code 2074, not the NRB Act. So the two work together — the NRB Act states the prohibition and protects the integrity of the currency, while the Penal Code provides the imprisonment and fine. A counterfeiting case is therefore prosecuted under the Penal Code.

Foreign-currency accounts are permitted only within the framework of the Foreign Exchange (Regulation) Act 2019 and NRB rules, which require NRB approval for opening and operating such accounts and set conditions on who may hold them and for what purpose. The position differs for residents, non-residents, foreign investors and remittance recipients. Because the eligibility and conditions are specific and set by NRB notice, confirm the current rule with NRB or a bank before opening an account.

No. The Nepali Rupee is the only legal tender in Nepal, guaranteed by the Government under the NRB Act 2058, and transactions within Nepal are conducted in Rupees. Foreign currencies such as the US dollar can be held and exchanged only within the foreign-exchange framework administered by NRB, and they are not a substitute for the Rupee in domestic payments. So prices and payments inside Nepal are legally in Rupees.

Nepal Rastra Bank, under the NRB Act 2058 and the Foreign Exchange (Regulation) Act 2019, formulates foreign-exchange policy and prescribes the system for determining exchange rates. The Nepali Rupee is held at a fixed peg to the Indian Rupee, while rates against other currencies move in line with the Indian Rupee and market conditions. NRB publishes daily reference rates, which banks and money changers use as the basis for their buying and selling rates.

The Foreign Exchange (Regulation) Act 2019 allows the Government, through a notice, to require holders of foreign exchange to sell or deposit it at the rate determined by Nepal Rastra Bank, and prohibits delaying or forgoing foreign exchange due from abroad without NRB permission. This surrender and non-forgoing duty is part of how Nepal manages its foreign-exchange reserves. The statute states the duty rather than a fixed deadline, so the operational detail is set by NRB.

Yes, within the foreign-exchange framework. The Foreign Exchange (Regulation) Act 2019 contemplates that payments from foreigners for goods and services are received in convertible foreign currency, and exporters and service providers routinely receive foreign-currency payments through the banking system. The proceeds are then handled under NRB rules, including any surrender requirement. So a business can be paid in foreign currency, but the receipt and conversion must run through licensed banks under NRB regulation.

Under the Foreign Exchange (Regulation) Act 2019, a breach can lead to forfeiture of the foreign exchange involved and a fine — up to three times the amount in question, or up to a set maximum where the amount cannot be established. Illegal dealing such as hundi is prosecuted under this Act. Because the consequences include both confiscation and a multiple-of-amount fine, foreign-exchange transactions should be kept within the licensed banking channel.

Yes, in two practical respects. The travel foreign-exchange facility per passport was revised upward in 2025, and a late-2025 government decision moved to allow Indian Rs 200 and Rs 500 notes to be carried across the border up to a per-person limit, to take effect through the gazette and NRB guidelines. Both are operationalised through NRB, so the current figures should be confirmed with Nepal Rastra Bank rather than taken from older guides.

When a foreign-exchange transaction, a remittance structure, or a currency-related allegation is involved. A lawyer confirms whether a holding, account or transfer needs NRB approval, advises on lawful remittance and foreign-currency accounts, and defends a person accused of a foreign-exchange or counterfeiting offence. Because the practical limits move with NRB policy, a lawyer also checks the current rule rather than an outdated figure before advising you to act.