Nagaland Home Minister Imkong L Imchen, who was arrested at the Tribhuvan International Airport on Wednesday morning on the charge of possessing notes of the denomination of Rs 1000 and Rs 500, which are banned in Nepal, flew to New Delhi in the evening after the police released him. Imchen had arrived in Kathmandu to attend a marriage ceremony as a commoner on June 27.

Embassy official preferring anonymity said the police released Imkong immediately after they carried out necessary investigation that lasted for over an hour. "Home Minister of Indian State of Nagaland who arrived in Kathmandu a few days ago on his personal visit was unaware about the Nepali law on cash limit," the official said.

Imchen, who won the 2008 election as a member of the Nagaland People's Front party from Koridang, was held while trying to board the Jet Airways flight from Kathmandu to New Delhi after a security check revealed he was carrying the banned currency notes. Over a decade ago, India's apex bank, the Reserve Bank of India, banned the transaction of 500 and 1000 Indian rupee notes outside India in a bid to crack down on the mushrooming counterfeit Indian currency racket with major hubs in Pakistan, Bangladesh and Nepal.

Carrying the banned notes in Nepal is a punishable offence that can merit up to five years in prison or a fine or both. As per the existing legal provision and monetary policy of Nepal, foreigners are not allowed to board any flight with more than $5000 or else they have to declare the cash to the airport officials.

According to Mahesh Dahal, director-general at the Revenue Department, as per the mutual understanding and request of the Indian government Nepal has banned the denomination of Rs 500 and Rs 1,000 across the country. "Possessing the contraband currency or beyond the declared cash limit is a penal offence in Nepal, and the offender has to pay cent percent fine and may have to face up to five years in prison or a fine or both," Dahal said.