On October 1, 2025, the Reserve Bank of India (RBI) Governor Sanjay Malhotra, in the context of internationalising the Indian rupee (INR), announced three measures that have the potential of adding serious positivity in India-Nepal ties.

The first is to allow authorised dealer (AD) banks to lend the INR to non-residents from Nepal, Bhutan and Sri Lanka for cross-border transactions. The second is that the RBI is now going to allow Special Rupee Vostro Accounts, which are accounts of foreign banks with Indian banks in INR, for investment in corporate bonds and commercial papers. This is in addition to the already permitted investments in central government securities. And, the third is to establish a transparent reference rate for currencies of India’s major trading partners to facilitate

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