Aruran Vinayagamoorthy, 32, from Mount Waverley and 36-year-old Sirarajah Yathavan from Vermont South were arrested last week after police raids.

They have been charged with belonging to and financially supporting the Tamil Tigers rebel group.

Police allege the men transferred money into overseas bank accounts and bought equipment in Australia that could be used to make bombs.

But their lawyer said there was no evidence they supported the group after 2005, when police first interviewed them.

The magistrate has denied the men bail, saying they have not proven exceptional circumstances.

The prosecution said the men were a flight risk and police would not be able to extradite them from Tamil Tiger territory.

The men return to court in July.