Recently, when the Pune unit of state Anti Terrorism Squad (ATS) arrested suspected Indian Mujahideen member Hussain Shabbir Nairuddin Gangavali from a mosque in Janwadi, off Senapati Bapat Road, he had in his possession counterfeit notes worth Rs 25,000.

It may be recalled that in March 2008, the Mumbai and Pune wings of the ATS had gunned down two Bangladeshi terrorists on Mira-Bhayander road. Police said terrorists were linked to the members of fake currency racket in the state and that they had surveyed sensitive areas.

Police inspector Peter Lobo of the ATS said investigations were on to trace the origin of these counterfeit notes and whether Gangavali was part of chain involved in circulating fake currency.

Earlier, the state ATS had recovered fake notes in the Rs 500 denomination from Ayaz Khan and Nadim Shaikh of Bhimpura in Pune Camp, both alleged members of the banned SIMI.

Sources from intelligence agencies say terror outfits from Pakistan and Bangladesh have been targeting cities like Pune with a vast banking network to circulate counterfeit notes. “Large volumes of counterfeit notes are brought into the country from the Bangladesh border through illegal channels. The notes are circulated in the Indian market for destabilising the economy,” the sources said.

Addressing the media last month, RBI Executive Director G Gopal Krishnan had said that with the rise in incidents of fake notes recovered from the currency chests of banks in the country, the RBI would soon propose that the central government sets up a separate agency or cell to deal with such cases.

When contacted, Shashikant Bugde, Managing Director of Cosmos Bank admitted that the fake currency issue was serious. “A huge number of counterfeit notes is being deposited in the banks. It is getting hard for the banks to identify the counterfeit notes,” Bugde said.

B Shivkumar. state head of IDBI Bank said, “The problem is taking on serious proportions.”

Suresh Patil, Assistant General Manager (administration) of State Bank of India however said that the problem of counterfeit notes can be controlled. “We have issued hi-tech machines for detecting counterfeit notes to all branches. Besides, the RBI has been conducting workshops for the bank employees to identify the fake currency,” said Patil. “It is, however, problematic for the public,” he said.