Calcutta, Nov. 15: As Delhi and Dhaka trade charges over alleged terror camps in Bangladesh, police here claimed to have stumbled upon evidence of a fake currency operation in the neighbouring country.

The police have gathered “conclusive evidence” on persons in Bangladesh engaged in producing counterfeit Indian currency and smuggling them into the city through North 24-Parganas and Nadia.

Director-general of police D.C. Vajpai sent a report to the Union home ministry today with details of police findings on terrorist activities across the border. “The ISI is behind the operation but we will thwart their efforts to destabilise our economy,’’ Vajpai said.

Deputy inspector-general of police D.P. Tarenia said two Bangladeshis, Mohammad Daulet of Shibgung and Mohammad Anirul of Meherpur, were arrested when they were trying to smuggle three cartons of forged Indian currency into the city.

Daulet and Anirul named their contacts on both sides of the border during interrogation. They also revealed details about their modes of operation.

Daulet and Anirul told the investigators that the fake notes were printed in Bheramora and Jinaidaha in Khustia and other areas in Rajsahi and Dhaka.

Fake notes worth more than Rs 5 lakh, in denominations of 500, 100 and 50, were seized in raids on locations at Lake Town on the outskirts of the city, Barasat in North 24-Parganas, in Nadia and Murshidabad.

The police admitted that fake 500- and 100-rupee notes have flooded Calcutta.

They named Raja Basak, Abdul Gaffar and Samsul, all Indians, as close associates of Daulet. The three were picked up from their hideouts in Nadia and Murshidabad.

“Those already arrested told us sophisticated machines have been installed in several Dhaka apartments to print fake Indian notes,’’ Tarenia said.

The seized documents and slips with hand-written messages mention note-printing units at Mokbazar, Mirpur, Pallabi, Mohammedpur Noorjahan Road, Rabna, Rajabazar and Tezgaon, all around Dhaka.

The Telegraph came across one such message slip, with “Mokbazar, Dhaka” written on it, tied to a bundle of fake notes. The message also indicated the number of notes a certain person had been given to smuggle across the border.

Investigators have seized several such slips from Daulet, Anirul and their associates.

Reserve Bank officials in the city today asked businessmen and bankers to be careful while dealing in Rs 500 and Rs 100 notes. “We have directed bankers to notify the police if they come across any forged currency note,’’ a senior RBI manager said.

The police have seized a diary and public phone booth bills showing numbers in Dhaka, Rajsahi and Kustia.

“The telephone numbers are linked to some of the notorious crime lords in Bangaldesh, Arman and Liaquat in Mokbazar and Kala Jahangir in Mirpur,’’ an officer of the special investigating team said.

“The underworld prints the notes and distributes them to agents like Daulet and Anirul, who smuggle them into the city,’’ an intelligence branch officer said.

“The ISI is funding the operation,’’ said Tarenia.