Shabana, who had first come to Nepal in 1974 to take part in the filming of Dev Anand's "Ishq Ishq Ishq", Monday returned on a three-day visit to raise awareness about HIV/AIDS.
Shabana, who is also a former member of parliament and social activist, is in Nepal as the SAARC Goodwill Amabassador for Uniting against HIV/AIDS and TB, an honour she shares with renowned Sri Lankan cricketer Sanath Jayasuriya.
"I feel fully committed, " she told the media Tuesday.
"The human rights aspects of living with HIV/AIDS are responsible for my involvement in these 18 years."
Shabana, who was the first Bollywood actor to take part in a public service film 15 years ago that projected the message that AIDS does not spread by touch, said myths still abound about HIV/AIDS.
"There are doctors, lawyers, politicians and mainstream people who still think people with HIV/AIDS deserve to die because they are immoral, " she said.
"People still believe AIDS is a product of western culture and satellite TV and it's only truck drivers and prostitutes who have AIDS.
"It is unjust, unfair and untrue."
Contrary to the perception that stigma about AIDS prevailed in the poor segments of society, it is the middle and upper classes who show greater prejudice, Shabana said.
"There are horror stories, " said the star who acted in the 1997 film "Positive", that was part of the four-film "AIDS Jaago" project conceptualised by director Mira Nair to generate awareness about the disease.
"People have been tied in chains and kept in dungeon-like situations like they used to do with lepers (in the past).
"An entire village was not allowed to vote because one person had AIDS. No official was ready to go there."
The rise of HIV/AIDS is also related to sexual discrimination and lack of empowerment for women, Shabana said.
She pointed out that while AIDS cases had decreased among commercial sex workers after they were educated about condom usage, it had gone up among housewives.
"It is alarming, " Shabana said. "It shows housewives can't negotiate condom usage."
Shabana believes that she has a role to play in sensitising the media and women empowerment.
She also underscores the need for a united approach to battle AIDS.
"The porous border (between India and Nepal) shows how susceptible we (all) are, " she said. "It is not the day of nations fighting AIDS but regions (fighting together)."
Shabana, who met Nepal's Health Minister Giriraj Pokhrel Tuesday will also call on Maoist Prime Minister Pushpa Kamal Dahal Prachanda Wednesday.
Besides, she is scheduled to visit an orphanage.