Rajbiraj, May 1 -- For the past six weeks, Ramchandra Sah has been moving between customs offices, police desks and local administrators, trying to recover the cash he said was meant to keep his wife alive.

Sah, from ward 4 of Rajgadh Rural Municipality in Saptari district, had returned from India in early March carrying his savings-250,000 Indian rupees-earned over years of labour in Gurugram, where he has worked for more than two decades. His wife, 50-year-old Maheshwari Devi Sah, has been battling cancer for four years, and the money was intended for her continued treatment.

The plan was straightforward. After reaching home, Sah needed to convert the Indian currency into Nepali rupees before taking his wife to BP Koirala Memorial Can...