Lucknow, Fake currency worth Rs.2 million was recovered by Reserve Bank of India (RBI) officials and sleuths of the Uttar Pradesh police during a raid on a public sector bank's currency chest at Domariyaganj near the border with Nepal.

The racket was exposed during a raid Monday night at the State Bank of India's currency chest from where the cash for all the local branches is distributed.

The team also found a sum of about Rs.7 million missing from the bank's chest.

According to bank sources, 20 bundles of Rs.1,000 currency notes were found to be carrying the same serial number (5 CK 756601).

Additional Director General of Police Brij Lal said: "This racket has been thriving with the connivance of the bank staff, who were clearly found to be involved in clandestine replacement of notes with fake currency."

"This was the first time that a public sector bank was found to have been used to systematically push counterfeit currency into the open market," he said.

The manager of the bank, Dashrath Chirgainya, informed that the chest had about Rs.1.84 billion and the bank supplies cash to other smaller branches of the district and neighbouring districts.

"The bank transacts around Rs.1 crore (Rs.10 million) a day and the good turnover is because most of the people of Domariyaganj work in Gulf countries," claimed Chirgainya.

About Rs.4 million is also withdrawn daily from the ATMs of the bank throughout the city, he added.

The scam has its roots in the arrest last week of four people with wads of fake currency notes in Domariyaganj town.

"Sustained interrogation of Abid Sheikh alias Pundit, who was among those arrested, gave us leads to SBI bank cashier Sudhakar Tripathi from whose residence we discovered Rs.700,000 in cash," Lal told IANS

However, the cops found only Rs.5,000 of the Rs.700,000 to be fake.

Tripathi, who started his career in 1974, spent most of his service in this branch. "He remained there till 1986, and barring transfer for a small period after this, he remained posted there till the time of his arrest," a bank source informed.

The police, after Tripathi's arrest, urged RBI higher-ups to scan the currency chests of different banks, particularly in the towns bordering Nepal, from where most of the counterfeit currency is believed to be routed.

The screening of currency notes was under progress till the early hours of Tuesday. According to sources, more anomalies are suspected to be unearthed once the RBI team completes its investigation.

Raids are expected to be carried out in other banks of Siddharth Nagar district and other districts on the Nepal border shortly.

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