Kathmandu, Nov 9 : A Pakistani couple have been found to be involved in running a fake Indian currency network in Nepal.

Mohammad Ali Zamindar and his wife Sahebi Zamindar had been running the racket from their residence in Balaju in the capital, police said.    

Following reports by spies, police raided the house and found a cache of fake Indian notes totalling nearly Rs. 2.7 million. The money was in denomination of Rs. 500 and Rs. 1,000, which have been banned in Nepal for nearly a decade to crack down on the fake currency racket that is believed to extend to the Middle East.    

However, Zamindar, who was not at home during the operation, is at large. Police have arrested Sahebi and her elder son Kabir.    

Sahebi was originally a Nepali from Kavre district - Kavita Barmasakha - who after her marriage to Zamindar converted to Islam and took Pakistani citizenship.    

The arrests came Friday, the day Indian Home Secretary G. K. Pillai began security talks with his Nepali counterpart Govinda Prasad Kusum in Kathmandu.    

The bilateral talks focused on combating cross-border terrorism in South Asia, especially Pakistan's Inter Services Intelligence (ISI)-sponsored anti-India activities.    

During his interaction with the media the following day, Pillai referred to a counterfeit currency network busted by police Friday but did not give any details.    

Nepal police too have kept silent on the arrest. Sahebi has made important revelations regarding the route followed by the counterfeiters, the Naya Patrika daily said Monday.    

On the same day, police raided yet another private residence in Kathmandu's neighbouring Lalitpur town to bust yet another fake Indian currency network.    

Sheikh Ahmed, 52, who hails from Parsa district on the India-Nepal border, was arrested along with his 18-year-old son Sahid Iqbal Ahmad after police ferreted out over Rs. 5.4 million in fake Indian notes in their residence in Kupondol.    

The money, which too was in Rs. 500 and Rs. 1,000 denominations, was hidden in a suitcase with a false bottom, police said.    

The double raid, conducted during the Indian home secretary's stay in Kathmandu, has increased the rapport between the two sides, with Pillai saying that India was happy with Nepal Police's initiative to combat the growing counterfeit money racket.

The Indian administration suspects Pakistan's intelligence agency, the ISI, to be actively involved with the collusion of officials stationed at the Pakistani embassy in Kathmandu. (IANS)