The National Investigation Agency (NIA) on Friday seized fake currency of Rs 96,000 in Mumbai.
The NIA registered a case under section 34, 489D and 489C of Indian Penal Code (IPC).
The currency was seized from two persons in Mumbai.
In a similar incident, fake currency notes with a face value of over Rs 4 lakh were recovered from a vehicle near Bhiwandi in Thane district of Maharashtra and five persons were arrested in this connection.
The action was taken on Thursday based on a tip-off, police said.
"Acting on a tip-off that some people carrying fake notes were coming to a pan shop at Wadpe, the police patrol team laid a trap and arrested the accused when they were buying cigarettes using fake notes," a police officer said.
Total 203 fake notes of Rs 2,000 denomination were recovered from the car.
The five accused were identified as Rehan Abbas Shaikh (22), Safad Mukhtar Ansari (19), Anees Iqbal Shaikh (31), Kishore Phular (25) and Rohit Singh (23), police said.
The police are trying to find out the source of the fake notes and where they were being transported.
The five accused were booked under IPC sections 489 (B) (using as genuine, forged or counterfeit currency-notes or bank-notes), 489 (C) (possession of forged or counterfeit currency-notes or bank-notes) and 34 (common intention).
(With Agency Inputs)