Intelligence Bureau officials have information that fake Indian currency is being printed in Karachi, Quetta and Lahore [Images], under the patronage of Pakistan's Inter Services Intelligence.

IB officials have already warned the Centre about fake currency making inroads into the Indian economy through Nepal and Bangladesh. The IB believes that the ISI and its allies use the sea to dispatch fake currency worth hundreds of crores of rupees into India.

Terror handlers ensure that any would-be terrorist from Pakistan entering India to participate in subversive activities must carry fake currency. IB sources say the ISI's fake currency racket is currently limited to denominations of Rs 500 and Rs 1,000.