Abhishek Kumar, 31, who hailed from Muzaffarpur in Bihar, was arrested yesterday at Birgunj area of Parsa district, police officials said.
Officials recovered counterfeit Indian currency with a face value of Rs 330,000 from his possession.
According to Superintendent of Police Raju Babu Shrestha, Kumar was arrested by a team deployed from the district police office during a regular security check in Birgunj bordering Raxaul town in India.
The police sent Kumar to the Department of Revenue Investigation in Kathmandu for further investigation.