Counterfeit notes production sharply fell by 68% from 2014 to 2024

The printing of fake notes or counterfeit notes has gone down significantly during the NDA government regime. Data from the Reserve Bank of India (RBI) showed that approximately Rs 7.98 crore worth of counterfeit notes were detected in FY23. This is 70 per cent lower than Rs 24.84 crore of fake notes found in FY14.

Counterfeit currency refers to fake money created with an intent to deceive the system. The presence of fake currency notes can significantly impact the economy by devaluing legitimate currency and contributing to inflation. Counterfeit notes represent a small fraction of the total currency in circulation, decreasing from 0.0194% in FY14 to 0.0024% in FY23.

Last year in a report RBI said the number of counterfeit currency notes of Rs 500 denomination detected by the banking system, rose by 14.6 per cent to 91,110 pieces in 2022-23 compared to last year.

At the same time, the number of counterfeit notes of Rs 2,000 denomination detected by the system, fell by 28 per cent to 9,806 pieces during the same period. The central bank said although the total number of Fake Indian Currency Notes (FICNs) detected in the banking sector declined to 2,25,769 pieces in 2022-23 from 2,30,971 pieces in the FY2022, it is noteworthy that it had surged in 2021-22.

Delhi Police reported receiving complaints from multiple banks about counterfeit Indian currency notes worth over Rs 54 lakh between July and December 2023. The Reserve Bank of India and 15 other banks lodged complaints. The largest amount of fake notes, Rs 16.3 lakh, was detected at a private bank, followed by Rs 15.7 lakh at another private bank, mostly in Rs 500 denominations.

Madan Sabnavis, Chief Economist of the Bank of Baroda, told Hindu Business Line: “Counterfeit currency poses a constant threat to the economy. It often appears authentic in its features, making it difficult for people to differentiate between real and fake currency. By the time an individual realises it is counterfeit, it has already circulated further into the economy. This problem is prevalent worldwide, with significant political implications, such as the financing of drugs or terrorism through counterfeit currency.”

Data on fake currency

The RBI data show that fake notes peaked in 2016-17 at Rs 43.46 crore. This was the year when the demonetisation was announced. However, since then, it has declined sharply to Rs 8.26 crore in FY22 and further to Rs 7.98 crore in FY23.

In FY23, the number of fake notes detected in the denominations of Rs 10 were 313 pieces, Rs 20- 337 pieces, Rs 50 - 17,755 pieces, Rs 100 - 78,699 pieces Rs 200 - 27,258 pieces, Rs 500- 91,110 pieces, Rs 500 (specified banknotes - 6 pieces), Rs 1,000 (specified banknotes -482 pieces).

The total expenditure incurred on security printing during 2022-23 was Rs 4,682.80 crore as against Rs 4,984.80 crore in the previous year.

Sabnavis said: “Counterfeiters typically target higher denomination currency, which is why Rs 500, Rs 200, and Rs 100 denominations are counterfeited more frequently than smaller denominations. Whereas Rs 1,000 fake currency belongs to the pre-demonetisation period, which the RBI is still somehow finding in its system. The same goes for Rs 2,000 fake currency, which is from the older series and is no longer in use.”