The Nepal Rashtra Bank (NRB), the country's central bank, had estimated that its citizens held Rs 3,500 crore in the Rs 500 and Rs 1,000 notes India banned on November 8. The arrests are the largest in a series of crackdowns that have revealed attempts to sell banned notes in Nepal, where there is still hope that the RBI may exchange Indian currency later. Last week, the CIB in Nepal arrested another 15 people holding large stashes of banned Indian notes. But India has also made a sovereign commitment to Nepal and Bhutan that it will exchange their notes. That promise means New Delhi's delays open a larger window for those holding banned notes to siphon them to Nepal in the hope that they will get back some money in return.

Source: The Telegraph May 24, 2017 22:18 UTC