Nagaland Home Minister Imkong Inchen was detained at the Kathmandu airport on Wednesday for carrying Indian currency notes in the denomination of Rs 1000 and Rs 500, which is banned in Nepal.
Official sources in Kohima said the minister was not aware of the ban.
The sources said that after receiving the information, the government immediately informed Union Home Minister P Chidambaram about the detention.
Abu Metha, Press Secretary to the state chief minister, said that Indians frequently face the problem in Nepal as most of them are not aware of the ban.
While it was not known how much amount the minister was carrying, unconfirmed reports said he had Rs nine lakh with him.