Nepal has modern banking facilities and some international banks even have offices in Kathmandu. Almost all foreign currencies along with credit cards such as American Express, Visa, and Master card are accepted in Nepal.
All visitors are required to exchange their money through the bank or authorized agents. In Kathmandu banks with money exchange counters are found everywhere and most hotels also have exchange counters. These facilities to change money are quick and convenient. It is necessary to ask for receipts when money is changed. On the return journey, if one is left with Nepalese rupees they can be exchanged for 15% of the amount on these receipts into any foreign currency at the Kathmandu International Airport. Remember to retain Rs. 700 for airport tax when departing on flights to SAARC Countries (India, Bhutan, Pakistan, Bangladesh, Sri Lanka and Maldives) or Rs.1650 or all other international destinations.
It is generally not possible to change foreign currency/travelers checks (except in Namche Bazaar, Jomsom, Salleri, Okhaldunga, Pokhara etc.) in the mountains. One must therefore change required money in Kathmandu before the trek starts. When cashing money for the trek, always ask for small denominations.
The unit of the Nepalese Currency is Rupee. One Nepali Rupee is made up of 100 paisa. Nepali Rupee notes come in Rs. 1, 2, 5, 10, 20, 25, 50, 100, 500 and 1,000. Coins come in paisa 5,10,25,50 Rs. 1 , 2, 5 denominations. Paisa coins are not currently used for common transactions.
Foreign currency and travellers cheques can easily be exchanged at banks or authorized agents. In Kathmandu banks have money exchange counters, which are quick and convenient.
Mastercard, Visa and American Express are accepted at all major Hotels, Travel Agencies, Restaurants and Stores. Only the first two though, are currently accepted at banks for money advances. ATM services are also available in Kathmandu but not in rural areas
In the cities, and specially while trekking, change for Rs500 and Rs1000 bills is not easily available. So better ask for small denominations (ones, twos, fives, twenties and some in fifties and hundreds - never in five hundreds and thousands), and be careful about torn or damaged bank notes. The people in the village may not accept them.