CBI sleuths on Saturday raided three premises belonging to Bihar Awami Cooperative Bank chairman and former MLC Anwar Ahmad, known as RJD chief Lalu Prasad's " kebab mantri", on charges of money laundering and using his commercial establishments to launder demonetised Rs 500 and 1000 notes.

Anwar heads Al Rabia Memorial Educational and Welfare Trust, Mother's International Technology and Management Institute and Mother's International Academy located in Phulwarisharif and Sabzibagh localities of Patna.

"We have registered an FIR against Anwar and his associates on charges of money laundering, about which complaints were received after the announcement of demonetisation on November 8 last year," a senior CBI official told The Telegraph on the condition of anonymity as he is not authorised to speak to the media.

"Following the FIR, our teams today raided the premises of Bihar Awami Cooperative Bank in Patna, Anwar's residence at Sabzibagh and Mother's International Academy located in Phulwarisharif," the official added.

The raid was going on till the time of filing of this report. CBI sources alleged that Anwar got a huge amount of unaccounted money in the form of scrapped Rs 500 and 1,000 notes after demonetisation. He allegedly tried to pass them off as money belonging to his educational institutions.

"He used various measures to show the scrapped money as donations to his educational institutions and launder it (turn the unaccounted or black money into white)," a CBI source said.

The income tax department had raided four commercial and residential premises of Anwar on January 12 this year and had also named his relatives and associates Farhad Ahmad, Arshad Ahmad and Parvez Alam among the key suspects.

The I-T sleuths had detected around 60 bank accounts at Bihar Awami Cooperative Bank that, they alleged, were used to launder scrapped notes.

The raid has shaken political circles as Anwar is considered a part of Lalu Prasad's family, with free access to the RJD chief's household.

Anwar, an RJD MLC in the nineties, called himself the "Hanuman of Lalu". Other political colleagues lovingly called him " kebab mantri" as he would serve the delicacies to Lalu.

Former Prime Minister I.K. Gujral had resided at Anwar's house while contesting the 1991 mid-term general elections from Patna on a Janata Dal ticket. However, the poll was countermanded over reports of large-scale rigging. Lalu used his party's numerical strength to send Gujral to the Rajya Sabha in 1992 from Bihar.