India’s fake current market may have witnessed a manifold increase with the country’s banking regulator Reserve Bank of India (RBI) admitting of detecting counterfeit currency worth Rs 24.7 crore in 2011-12, a five-fold increase in the number in the past five years.
As a result, the RBI received 5.21 lakh fake notes in the last financial year from the banks as compared to 1.95 lakh in 2007-08. In 1996 --- the year when RBI started collecting fake notes --- only 11,533 counterfeit currency was detected.
The high increase in the value of fake notes was primarily because of a quantum jump in circulation of counterfeit notes of Rs 500 and Rs 1,000 denominations, mostly in the last five years. The data provided by RBI to Right To Information (RTI) applicant Subhash Aggarwal is just an indication of the fake notes in circulation as the government does not have any “estimate on the counterfeit notes in circulation”.
Although the risk is attached with producing fake notes, RBI own data shows that the cost of production of currency reduces as the denomination increases. The average cost of printing Rs 1,000 denomination currency note is Rs 4.06 as compared to 50 paisa for Rs five currency note. For those in the business of fake notes, the cost would be less as they don’t use the high quality paper and safety measures like RBI.
The RTI reply also says that to check circulation of fake notes and to increase life of currency notes the RBI has started a pilot in five cities --- Mysore, Kochi, Shimla, Jaipur and Bhubaneswar --- to circulate one billion plastic or polymer based currency notes.
“The field trial will be in the denomination of Rs 10 and further decision to introduce it or not would depend on the outcome of the trial,” RBI said in its RTI reply, adding that adding new safety features to remain ahead of counterfeiters was an “ongoing” process.
The RBI also said that the banks have been instructed that the notes received over the counter should be re-circulated only after proper authentication through machines. “This will make the banks bear the risk of fake notes rather than the common man,” the reply said.
2010-11: 18.9 crore
2009-10: 16.45 crore
2008-09: 15.5 crore
2007-08: 4.54 crore
Highest fakes in Rs 500 and Rs 100 denomination --- Of the notes seized in 2011-12, maximum were of Rs 500 denomination followed by that of Rs 100
Rs 1,000 notes witnessed biggest leap in counterfeiting --- from 3,151 notes in 2006-07 to 83,280 in 2011-12. The Rs 1,000 notes were released in 2001, when just six fakes were found.
Counterfeiting has witnessed five-fold increase since 2007-08 and 44 times since 1996-97.