Fake notes are rising at an alarming rate. According to the RBI, the number of counterfeit notes detected in India jumped by 20% in the period between 2010-11 (435,607) and 2011-12 (521,155).
Total banknotes in circulation grew by 7% during the same period.
But along with the problem, countermeasures have also increased. “Increased awareness among individuals and more note sorting machines in banks have led to detection of more fake notes,” said a senior Reserve Bank of India (RBI) official. Of the total counterfeits detected, 93% were in bank branches.
The number of note sorting machines, capable of detecting counterfeits, jumped from 4,000 at the end of April 2011 to 10,394 at the end of December 2011. RBI has advised banks to ensure that all notes received by them are processed on such machines before being re-issued.
Companies, too, are working on machines that will detect fake notes and the NCR Corporation is testing Bunch Note Accepting machines that function like ATMs, but have additional features of accepting cash from individuals and detecting counterfeits.