The shop owner felt the notes were not genuine and alarmed the cops after an argument broke out with the five men.
The accused were arrested from the spot which led the police to the fake notes.
Vishal Garg, Joint Commissioner of Police told reporters, "The total amount seized is Rs 56 lakh 74 thousand - all in Rs. 2,000 denomination". The notes had stamps of State Bank of India to make them look genuine.
The five men arrested are Manawar Mollah (29) from Jeypore, Sheikh Eklash Ahmed (26) from Uluberia, Sheikh Abul Kalam Azad (35) from Domjur, Sayyed Rehan (27) from Uluberia and Balai Mondal (23) from Barjora.
The police also said that the five accused were involved in smuggling of gold and that they had recently travelled to Mumbai, Odisha and Jharkhand. Their vehicles have also been seized.
The investigation will focus on the source of the fake currency. They could have either come in from Bangladesh or printed locally, says the police. They will also probe the possibility of an involvement of an international agency.