Mohammad Yousuf, Manzoor Ahmad Lone and Showket Hussain Chowdary were noticed to be moving in a suspicious manner by the police at Karan Nagar chowk and were stopped for questioning, a police spokesman said.
He said a search of the trio led to the recovery of a large number of counterfeit US dollars from their possession.
A case was registered under various sections of Ranbir Penal Code and investigation has been taken up, the spokesman said.
He said while Yousuf and Lone are residents of Handwara in north Kashmir's Kupwara district, Chowdary hails from Rajouri district in Jammu region.
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