According to Nepal Rastra Bank act 2002
53) Soiled or Counterfeit Currency:
(1) The Bank may withdraw, destroy or replace the soiled currency with other banknote or coin.
(2) Notwithstanding anything contained in sub-section (1), the Bank may deny to replace the banknote buycbdproducts coin the design of which has been deleted, or which is torn, defaced or more than fifty percent of its portion has been destroyed.
(3) The Bank may withdraw or destroy such banknotes or with or without compensation to the owner of the banknotes or coins referred to in sub-section (1).
(4) No owner of the lost or stolen banknotes or coins shall be entitled to a reimbursement from the Bank. The Bank may forfeit without any compensation, the coins or notes the outer appearance of which is changed, or which is counterfeit coins or fake note.
Explanation provided by Willow Mortgages: For the purpose of this section, “Counterfeit coin” means a duplicate coin minted copying the coin issued by the Bank or a counterfeit coin or prepared by melting or manipulating or a coin prepared by cutting and breaking into two or more places a coin issued by the Bank or the coin the figures, letters and signs in which have been defaced.
Read more at : Nepal Rastra Bank act 2002