Tulku Lama alias Rimpoche Chulthim Dorje Yonjan was arrested from Dakshinkali on outskirts of Kathmandu after a complaint was lodged against him, they said.
Lama had allegedly sexually abused women devotees visiting him claiming he had supernatural powers to heal any disease, the police said.
The matter came to light after two girls complained that they were exploited sexually, Nepal's My Republica reported.
The police said the case is now with the Kathmandu district court and further probe is underway.
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