Maoist activities are likely to suffer a major setback following the scrapping of Rs 500 and Rs 1,000 notes as the ultras may find it difficult to dispose of their cash, apparently in hundreds of crores, concealed in insurgency-hit regions of Chhattisgarh, police has claimed.

According to sources, Naxals have stashed over Rs 7,000 crore at their dumps in Bastar region.

Following the move, the state police have beefed up security at banks, ATMs and other economic establishments in the insurgency-affected pockets, particularly Bastar.

"As per intelligence inputs, the ban on higher currency has frustrated the Naxals and they may target ATMs, banks, post offices and other business establishments in near future in the areas of their presence," Special Director General of Police (anti-Maoist operations) D M Awasthi said.

"In view of it, security forces in all the districts, particularly those Naxal-affected, have been alerted and asked to enhance security of such establishments," he said.

According to Awasthi, Maoists collect crores of rupees through levy and extortion and keep cash with them or in the dumps in forests for their activities and distribution among their cadres and supporters.

With the demonetisation of Rs 500 and Rs 1,000 notes, Naxalites might make attempts through various ways via their local supporters or villagers to deposit the money or exchange it in banks. Therefore, checks are also being conducted to intercept unaccounted cash in these areas, he said.