Kathmandu, Nov 1: Illegal trading of fake Nepali currencies in the Kathmandu Valley and its outskirts has increased the risk to financial transactions in the general market, police have warned. Police have concluded that some organised Nepalis and Indian nationals have teamed up to carry out the production and transaction of fake currencies. Prior to this, the Nepali people and financial markets had heard about illegal transactions of fake Indian currencies, but trading of fake Nepali currencies has now become a reality in town, said police. In terms of illegal transaction of fake Nepali currencies, the Kathmandu Valley had not confronted the situation as such incidents were mainly found outside of the valley, Senior Superintendent of Police (SSP) Uttam Raj Subedi, chief at the Metropolitan Police Range, Kathmandu, said. On the eve of the Tihar festival, police arrested three Nepali nationals along with fake Nepali currencies from Nayabasti of Bouddha, Kathmandu. Police also seized a machine used to produce the fake currencies, along with Rs. 34,000 of fake currencies as well as genuine Nepali currencies. According to police, 290 bundles of paper which were prepared to print the fake currency notes were also seized. According to DSP Santosh Singh of Bouddha Metropolitan Police Circle, arrested Rajan Pariyar, Santosh Nepali and Mahendra Nepali were running the illegal business in a rented flat. They all hail from Melung Rural Municipality in Dolakha district. The arrestees conceded that they had already supplied Rs. 60,000 fake Nepali currencies in the market. According to SSP Subedi, some over ambitious youths in earning quick money have been indulging in such illegal practices. As per the police information, they have been doing such acts by through organised groups and individuals in sporadic places of the country. In some of the cases, Indian nationals were also found involved in producing fake Nepali currencies, he said. "These groups often transact few amount of fake Nepali currencies placing it in a bundle of genuine currencies while buying goods in the markets and paying bills in the restaurants, shopping malls and retail shops," SSP Subedi said. With the help of their organised networks in many parts of the country, they did very little transaction by one group so as to avoid chances of arrest, he said. Six months ago, police had also detained two Nepalis from Baghbazaar of Kathmandu for cheating Nepalis citing that they would help make genuine currencies from other genuine currencies. DIG and spokesperson of Nepal Police Bishwa Raj Pokharel said that transaction of fake Nepali currencies were increasing specially in Kathmandu and Birgunj, where the group had been found setting up a machine to produce the fake currencies. According to the police headquarters records, seven incidents of fake Nepali currencies took place in Kathmandu in the last one-and-a-half years and the police seized fake currencies amounting millions of rupees. According to the records, a so-called magician was arrested on Chaitra 4, 2075, for his involvement in producing fake Nepali currencies, one arrested from Gongabu along with fake currencies Rs. 150,000 on Magh 26, 2075.