Pakistan links to the counterfeit currency rackets from Parasalla and Kannur have been justified with the National Investigation Agency (NIA) busting a counterfeit currency racket in Hyderabad on Sunday.

Some vital information received from the racket in Kerala is also learnt to have helped the NIA bust the Hyderabad gang. Those held in Hyderabad confirmed that they used to get the currency from Bangladesh via Pakistan.

Members of the counterfeit currency gang held in Kerala as well as the kingpin and four others held in Hyderabad belong to Malda district in West Bengal.

All the gang members are suspected to be linked to the same network that has its roots in Pakistan, top sources in the home department said.

The spread of counterfeit currency rackets to the southern states including Kerala was discussed at a meeting of top officials in the NIA and the Kerala police here in November.

The NIA decided to take over the investigation of the Kannur and Parassalla rackets because of its international connections.

The findings of the Kerala police were also handed over to the NIA. As fresh developments come to light, an NIA team is expected to come to Kerala to interrogate those held from Parassalla on Oct. 22.

Sources also said the mobile phone records of the gang held from Parasalla had helped the NIA trace the Hyderabad gang.

The kingpin, identified as Morgen Hossain, confessed that the source of the currency was Pakistan, from where it was sent to Bangladesh by air.

Hossain admitted that the gang used to receive currency in bulk and distribute it to their agents, mainly those who worked in remote villages in the country as migrant labourers.

Meanwhile, the fresh developments pose a security challenge to Kerala that has been witnessing a heavy and unchecked inflow of migrant labourers from West Bengal over the years. Though steps have been initiated to monitor the flow, they are yet to be effective.