Officers said the forged HK$100 and HK$500 banknotes in the market have drawn their attention since August, and they have seized forged banknotes worth HK76,400 so far.

After investigation they targeted a 29-year-old man surnamed Ng for being involved in at least four cases related to the counterfeit notes, which took place between August 24 and September 28.

Ng, who made purchases in a store and paid taxi fare using two forged HK$100 banknotes in Mong Kok on Wednesday, was intercepted and arrested by cops.

The cops then searched Ng's residence in a Tsim Sha Tsui guesthouse, and confiscated the equipment Ng used to forge the banknotes, including an inkjet printer, glitter markers, reflective pigments, a seal, as well as other tools.

The man has been charged with a count of counterfeiting notes and a count of passing counterfeit notes. The case will be mentioned in West Kowloon Magistrates' Courts on Saturday morning.

Police warned the public that counterfeiting notes or making, possessing or passing counterfeit notes is a serious offense. The maximum penalty upon conviction carries a 14-year imprisonment.

Officers also encouraged citizens to report suspicious activities related to counterfeit notes by calling 18222, the 24-hour hotline of police's anti-deception coordination centre.