He was picked up from Nedumbassery airport early today and produced before the NIA special court here, which remanded him to seven days custody, Agency sources said.
Tahir Merchant alias Tahir Taklya, a close ally of Dawood Ibrahim and an accused in the 1993 Mumbai blast, is the main accused in the case. Tahir was the main link in distributing fake currency notes for extremist activities in India, especially Kerala.
According to NIA, the currency is believed to have been printed in Pakistan and distributed to India via Abu Dhabi.
The Directorate of Revenue Intelligence had on August 16, 2008, seized counterfeit notes of Rs 500 and Rs 1,000 denomination with a total face value of Rs 72.5 lakh from one Mohammed Alshah, who arrived at Kozhikode airport from Ras al-Khaima.
Three of his accomplices, who had come to receive him at the airport, were also arrested.