The Supreme Court of India on Monday upheld the Narendra Modi government’s decision to demonetize the notes of 500 and 1,000 denominations.  In November 2016, the Indian government had taken a controversial move of outlawing InRs 500 and InRs 1,000 currency notes in a bid to rein in black money. The move was challenged in the Indian Supreme Court. 

But on Monday, India’s apex court not only upheld the decision, but went on to state that it cannot be reversed. The demonetization move had also impacted Nepal, where Indian currency is widely accepted. The Nepali government has been requesting the Indian authorities to exchange the demonetized notes held by Nepali individuals, banks and financial institutions.

Several rounds of meetings have taken place between the officials of the two countries, but to no avail.  With the latest court verdict, chances of the demonetized Indian bills getting exchanged appear slim. One of the reasons India has shown reluctance to exchange the demonetized notes held by Nepalis is the issue of counterfeit bills.   According to Nepal Rastra Bank, banks and financial institutions hold demonetized bills worth InRs 33.6m.