Nepal Rastra Bank has issued a circular to commercial banks of Nepal instructing them to restrict the amount a Nepali cardholder can spend via their debit/credit cards at Indian point of sales. According to the central bank, the decision is taken to control reckless shopping behaviors by Nepalis in India, and aims to control the nation’s outflow of foreign exchange.
According to the circular, a Nepali cardholder will be allowed to spend IRS 1,00,000 (NRS 1,60,000) per month via their cards. The restriction does not apply while clearing hotel bills, hospital bills, or at pharmacies, rather targets retail outlets. The rule has already come into effect.
In addition to the card spending limit, a Nepali card holder is allowed to withdraw IRS 15,000 per day or IRS 1,00,000 per month from Indian ATMs.
The decision has come weeks after the central bank banned higher denominations Indian currency in the nation (200, 500, 2000).
Battling a rising deficit which is putting a strain on Nepal’s foreign reserves, the apex banking institution has imposed various restrictive measures. A month ago, the bank said they would cap foreign exchange to USD 1,500 per passport holder from USD 2,500.