A case was registered against the three men, police said.
Scrapped currency notes with Rs 99.65 lakh face value were recovered in Aurangabad on Thursday and three men were arrested in this connection, police said.
The arrested accused were identified as Isak Shabir Shah, 40, Mohammed Naeem, 45, and Mohammed Ilyas, 38, police said.
"Isak, a resident of Gangapur in Aurangabad district, had arrived in the city with the scrapped currency notes. He wanted to exchange those notes with Naeem and Ilyas, who are local residents," he added.
Isak told the police that as per the deal, he was to get Rs 20,000 for exchanging the scrapped notes.
A case was registered against the three men, police said.