Nepal’s central bank has banned the exchange of the new Rs 2,000 and Rs 500 Indian currency notes within the country till the Reserve Bank of India issues a notification under the Foreign Exchange Management Act, Hindustan Times reported on Thursday. The Nepal Rastra Bank has said that the newly-issued currency notes are “unauthorised and illegal” till it receives a notification from its Indian counterpart, according to Nepalese website Onlinekhabar.

The Indian government’s move to demonetise Rs 500 and Rs 1,000 notes has affected people in the neighbouring country, where the Indian rupee is a widely-accepted currency. A spokesperson for the Nepalese central bank, Ram Poudel, said, “As of now, our understanding with the RBI is that a Nepali citizen can hold up to Indian Rs 25,000 [in the] old Rs 500 and Rs 1,000 notes. The fate of those old notes is uncertain. How can these new Indian notes coming into the market be considered legal?”

While the NRB has proffered guidelines to the RBI via the Indian Embassy in Kathmandu, it has refused to allow over-the-counter exchange of currency notes, saying it does not have the technology to verify authentic notes.

Moreover, analysts said India is hesitant to provide exchange facilities in other countries as it could be used to circulate counterfeit currency.