Rs 50 lakh worth of demonetised currency was seized during a CCB raid on a jeweller’s house on Link Road, Langford Town, central Bengaluru, on Friday night.

Sleuths of the Central Crime Branch (CCB) raided the house of Anand Jain, who runs a jewellery store in Adugodi, after receiving a tip-off that two men were trying to legalise the banned notes. Rs 1 lakh was said to be the commission for legalising Rs 1 crore worth of scrapped notes. Besides Jain, they also arrested Vinaya Prasad, a real estate businessman from Ejipura.

When CCB sleuths found the scrapped currency — Rs 1 lakh in 1,000-rupee notes and the rest in old 500-rupee bills — the men gave conflicting answers about the source of the money, a senior police officer said.

Initially, the suspects said they got the banknotes from a few NRIs who wanted to get them exchanged as they couldn’t come to India because of time constraints. The NRIs were ready to pay a “fee”, according to the suspects.

But Jain and Prasad changed talk later, saying they got the notes from friends who are into real estate business and who promised them handsome commission for getting them legalised.

The officer suspected that the two men were planning to “dupe” people by promising to legalise old banknotes. “We are investigating whether they got any help from unscrupulous bank officials because it is just not possible to swap such a large amount of scrapped currency without their connivance,” he said. “We suspect a huge racket.”

In a first, the CCB has booked the men under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, which makes possession of more than 10 scrapped notes a criminal offence liable for punishment with fine of Rs 10,000 or five times the cash held, whichever is higher.

The CCB said it was hunting for two other suspects — Vijay Kumar, who runs a jewellery store in Sadashivanagar, and Salam, a real estate businessman.