Nepal’s central bank recently approved a regulation to increase limits on cash withdrawals from ATMs in India for its accountholders who travel there.
The bank made the change June 18 to combat a growing shortage of Indian currency in Nepal by allowing more Indian rupees to flow back to the country when its residents return home.
Beginning this week, consumers living in Nepal who have Nepali bank accounts may withdraw no more than 200,000 rupees (US$4,378 3,534 euros) per month from Indian ATMs, according to Nepal Rastra Bank. They previously could withdraw only 25,000 Indian rupees per month at Indian ATMs, a spokesperson for Nepal Rastra Bank tells PaymentsSource. They now may withdraw up to 25,000 Indian rupees per transaction.
Accountholders may access as much cash as they need if they submit documents to their banks showing a sufficient reason, such as for medical treatment, education or busines, according to the central bank.
“Nepal is India’s biggest trading partner,” an official from Mumbai-based State Bank of India Ltd. tells PaymentsSource. “But thanks to various politico-economic reasons, it has managed a ballooning trade deficit with India, causing a lack of Indian currency there. That is why this new regulation has been introduced.”
State Bank of India operates a joint venture, Nepal SBI, in Nepal with Everest Bank Ltd.