As India raised concerns over large scale smuggling of counterfeit currency from Nepal, the two countries on Saturday agreed to step up vigilance on the border what would also help combat terrorist activities and human trafficking.

At the home secretary-level talks concluding here on Saturday, Nepal and India also inched closer to an extradition treaty.

At the the two-day meeting between the Indian side led by Home Secretary Gopal K Pillai and the Nepalese side headed by Govinda Kusum both reiterated their commitment to not allow their territories to be used for activities against the other, said a statement.

Both sides also discussed the security situation in South Asia and ways to check cross border criminal activities, Kusum told reporters.

The two sides also agreed to hold meeting of the Joint Working Group of Border Management in the first quarter of next year and step up cooperation to prevent smuggling of fake currency, human trafficking and terrorist activities.

"The talks were very fruitful and both sides agreed to continue cooperation in security matters, border management and maintaining peace and security," said Pillai.

On the Extradition Treaty, he said it is passing through various processes and there is a need for high level political discussion before initialing it between two Home Ministers.

"There are no differences as regards the draft of the treaty," Pillai said in a question.