Circulation of fake currency notes continues to pose challenge

Photo used for representational purpose only. File
| Photo Credit: H.S. Manjunath

Circulation of Fake Indian Currency Notes (FICN) in the country continues to pose a challenge even after the 2016 demonetisation, whose one of the key objectives was to eradicate counterfeiting of notes.

According to report of the National Crime Control Bureau (NCRB), FICN with the face value of ₹245.33 crore has been seized by the law enforcement agencies across the country since 2016 — the year the Centre demonetised ₹1,000 and ₹500 notes.

Also read:Currency in circulation rises by 83% since demonetisation in 2016

The highest amount of FICN with the face value of ₹92.17 crore was seized in 2020 while the lowest with the face value of ₹15.92 crore was seized in 2016.

In 2021, FICN of ₹20.39 crore face value was seized in the country, of ₹34.79 crore in 2019, ₹26.35 crore in 2018 and ₹55.71 crore in 2017, the NCRB data showed.

According to the RBI annual report, published in May 2022, the number of fake currency notes of 500 denomination detected by the banking system more than doubled to 79,669 pieces in 2021-22 fiscal over the previous year.

The number of counterfeit notes of 2,000 denomination detected in the system was 13,604 pieces during 2021-22, up 54.6% from the preceding financial year.

After declining in 2020-21, the total number of FICN of all denominations detected in the banking sector increased to 2,30,971 pieces from 2,08,625 pieces in the previous fiscal.

During 2019-20, the number of FICN stood at 2,96,695 pieces.

“Compared to the previous year, there was an increase of 16.4 per cent, 16.5 per cent, 11.7 per cent, 101.9 per cent and 54.6 per cent in the counterfeit notes detected in the denominations of Rs 10, Rs 20, Rs 200, Rs 500 (new design) and Rs 2,000, respectively,” said the RBI’s annual report for 2021-22.

The counterfeit notes detected in the denominations of ₹50 and ₹100 declined by 28.7% and 16.7%, respectively.

During 2021-22, out of the total FICN detected in the banking sector, 6.9% was detected at the Reserve Bank and 93.1% at other banks, the RBI report said.

One of the major objectives of the 2016 demonetisation of the then prevailing ₹500 and ₹1,000 notes was to curb circulation of fake currency notes.

On November 8, 2016, Prime Minister Narendra Modi had announced that ₹500 and ₹1,000 notes would cease to be legal tender in India from that midnight. Modi had said that the decision had been taken to “fight corruption, black money and terrorism”.

The ₹2,000 notes and ₹500 notes with a new design had been introduced after demonetisation.