Probing the trail of money used to fuel the unrest and terror in Jammu and Kashmir, the National Investigating Agency (NIA) on Tuesday seized demonetised currency worth Rs 36.34 crore being trafficked by people linked with separatists and terrorists in the national Capital.

The agency also arrested nine persons, including few residents of the Valley, in New Delhi along with the demonetised currency. NIA was 'amazed' to find that the separatists and terrorists were still hoping to exchange the demonetised currency to carry out unrest. A senior NIA official said due to demonetization and strict monitoring, terrorists and separatists were unable to exchange the banned notes and roped in hawala dealers across the country.

NIA is investigating a case related to financing of terror and separatist activities in Kashmir valley. "During the investigation, it had emerged that persons and entities linked to the separatists and terrorists were still in possession of a significant amount of demonetised currency which they could not deposit and convert during the period earmarked by the government," a senior NIA officer said.

The agency further pointed out that surveillance was mounted on such entities. "This led to unearthing of a conspiracy wherein a gang of such entities were making an attempt to convert this demonetised money into valid currency," the officer further noted.

An NIA team intercepted one such gang at Jai Singh Road near Connaught Place on Monday. They were carrying 28 cartons full of Rs 500 and Rs 1,000 notes in four luxury vehicles.

A total of seven persons were initially held and brought to the agency headquarters for further questioning. After the initial interrogation, nine persons were arrested on Tuesday in Jammu and Kashmir terror funding case. The accused will be produced in court on Wednesday.

The accused include three Delhi residents — Pradeep Chauhan (47), Bhagwan Singh (54), Ejajul Hassan (38); two Mumbai residents —Vinod Shreedhar Shetty (47), Deepak Toprani (60); three Kashmir residents — Shahnawaz Mir (45), Majid Yousuf Sofi (27), Umar Mushtaq Dar (27); and a Naagpur resident Jaswinder Singh (53).

The agency has also seized two BMW cars, a Creta SX and Ford EcoSport Titanium from the accused.