Has Nepal Set a Cash Transaction Limit of NPR 500,000?
Synopsis
Nepal has introduced a new regulation limiting cash transactions to NPR 500,000 to combat money laundering and terrorist financing. Effective January 15, this move aims to align with international financial standards amid concerns over illegal financial activities. Discover what this means for businesses and individuals in Nepal.
Key Takeaways
Nepal's cash transaction limit is NPR 500,000.
Effective from January 15.
Exceptions include loan repayments and cash deposits.
Measures aim to combat money laundering.
Aligns with international anti-money laundering standards.
Kathmandu, Jan 10 (NationPress) The government of Nepal has enacted a restriction on cash transactions, limiting them to NPR 500,000 per transaction for the purchase or sale of goods and services, effective from January 15.
According to a notice published in the Nepal Gazette, any individual, firm, company, or institution is required to conduct the purchase or sale of any service or goods, or any other transaction amounting to NPR 500,000 or more through a financial institution or banking instrument due to this cash transaction cap.
This decision aligns with the Asset (Money) Laundering Prevention Act, 2008, which empowers the government to impose such restrictions on cash transactions.
The government has introduced this cap to combat illegal financial activities, including money laundering and terrorist financing. This move comes as Nepal has been re-listed on the “grey list” of the Financial Action Task Force (FATF), the global body dedicated to anti-money laundering efforts.
There are specific exceptions to this cash transaction limit. It does not apply to cash deposits at financial institutions, loan repayments—including principal and interest—or cash transactions between financial institutions.
Furthermore, as long as the source and purpose of the cash are clearly explained, the restriction does not apply to the possession or transportation of cash within the country. Financial institutions are also allowed to provide cash exceeding the limit to depositors, provided they submit an application citing special circumstances.
In a related directive, Nepal’s central bank instructed licensed banks and financial institutions to make payments of NPR 500,000 or more through account-payee cheques or by directly depositing the amount into the concerned person's account, changing the previous limit of NPR 1 million.
According to the directive issued by Nepal Rastra Bank, payments of cheques drawn in the name of firms, companies, institutions, or offices must also be conducted only as account-payee cheques.
If a depositor submits an application seeking cash payment by stating a specific reason, and the details provided in the application are deemed reasonable, cash payments exceeding the specified limit may be authorized for such depositors.
Point of View
It is vital to recognize the importance of the Nepali government's decision to restrict cash transactions. This measure is a proactive step to combat financial crimes and align with international standards. The move not only aims to enhance the integrity of Nepal’s financial system but also reflects the government's commitment to transparency and accountability.
NationPress
10 May 2026
Frequently Asked Questions
What is the new cash transaction limit in Nepal?
The new limit for cash transactions in Nepal has been set at NPR 500,000 per transaction.
When does the new cash transaction limit take effect?
The new cash transaction limit will take effect on January 15.
Are there any exceptions to this cash transaction limit?
Yes, the limit does not apply to cash deposits at financial institutions, loan repayments, or cash transactions between financial institutions.
Why has the Nepali government imposed this cash limit?
The limit has been implemented to prevent illegal financial activities, including money laundering and terrorist financing.
How will this affect businesses in Nepal?
Businesses will need to adjust their transaction methods, ensuring compliance with the new regulations, which may involve greater reliance on banking instruments.
