The counterfeit notes in denomination of Rs 500 and Rs 1,000 are suspected to have been smuggled in from Bangladesh, they said.
All the accused were nabbed after Kukatpally police raided a pan shop in Borabanda locality on a tip off that the fake currency was being circulated from there.
According to police, one of them was identified as Hafeezullah Ali, who hails from Malda district in West Bengal, and is the prime accused in the case who brought the counterfeit notes for circulation here.
He allegedly handed over these to the husband-wife duo of Shamin and Nazireena, he said, adding that further investigations are on.
