Bengaluru, Dec 17 (PTI): CBI has arrested two employees of cash department of Reserve Bank of India in Bengaluru in connection with alleged conversion of Rs 1.99 crore of demonetised currency with specified bank notes of Rs 2,000 and Rs 100.

CBI sources said Senior Special Assistant Sadananda Naika and Special Assistant A K Kavin were arrested for unauthorised exchange of the currency and have been booked under charges of criminal conspiracy and cheating besides provisions of Prevention of Corruption Act.

Both the accused have been sent to four days of CBI custody by a special court in Bengaluru, they said.

"It is alleged that both the accused and other unknown officials of RBI, Bengaluru entered in criminal conspiracy with unknown others," CBI spokesperson Devpreet Singh said.

She said in furtherance with the criminal conspiracy, the accused, along with other unknown officials, who were entrusted with the responsibility of new currency notes, "fraudulently" gave away new notes to the tune of Rs 1.99 crore to RBI officials and others.

It is alleged that the exchange was done in violation of exchange limits imposed by the Bankers' Bank.

CBI had earlier arrested another employee of RBI in a separate case in which currency worth over Rs six lakh was converted by him using his influence over officials of State Bank of Mysore.