Police suspect that two persons carrying the cash were supposed to hand it over to five others who wanted it exchanged for old Rs 500 and Rs 1000 notes.
"Cash worth 2.73 lakh was found stashed in a bag. The duo carrying the bag failed to produce appropriate documents or to explain source of cash," said Mylavaram police sub-inspector G. Ramakrishna.
Police have registered a case and will report the matter to Income Tax department for further investigation.