The Special Task Force (STF) on Monday uncovered a racket in fake currency notes and seized counterfeit Indian currency notes with face value of more than Rs 10 crore.

Chandrasekhar Jaiswal, a 50-year-old scrap dealer, has been arrested for his alleged involvement in manufacturing fake notes.

The police said they had seized chemicals, stamps and other equipment used for manufacturing fake notes, as well as forged notes of other countries, including the US, from Jaiswal's Maniktala house. "The seizure points at the existence of fake notes manufacturing units in the city and its surrounding areas," an officer said.

"We had a specific tip-off and rounded up Jaiswal from the intersection of Beadon Street and Amherst Street on February 27. We found 200 fake notes of Rs 1,000 denomination each on him," said Amit Javalgi, deputy commissioner of police, STF.

The STF team raided a godown in Domjur, Howrah, on the basis of what Jaiswal allegedly said during interrogation. "We found 450 gunny bags stashed with shredded Indian notes," Javalgi said.

"The second raid was conducted at Jaiswal's house on CIT Road in Maniktala. Fake notes of several countries, industrial equipment, chemicals, stamps, cheques, 20 Internet dongles with 4G speed and unused SIM cards were found in Jaiswal's house."

The police suspect more than one person's involvement in the racket and did not rule out links with terror outfits. "We have contacted central agencies such as the National Investigating Agency to find out whether the fake notes were channelled outside the country," Javalgi said.

An STF officer said those involved in the racket had cracked almost all security codes of the Reserve Bank of India.