Meerut, May 21 -- The arrest of a police constable and two others, who were found to be in possession of Rs.1.5 crore in demonetised notes in Moradabad's Dilari, has created a flutter since police claimed that some bank officials were also involved in the racket.

While the district police said they had exposed the well-organised racket that involved illegal exchange of scrapped notes, they noted that how these notes found their way into the banking system needed a thorough investigation.

The seized currency included 14,636 Rs.500 notes and 7,681 Rs.1,000 notes, which have been out of circulation since the government's demonetisation move on November 8, 2016.

As per the existing norms, banks are not allowed to accept phased-out currency...