Fake notes among the new design notes of Rs 500 more than doubled with an increase of 121 per cent whereas those of Rs 2000 increased by 21.9 than the previous year during 2018-19.
Narendra Modi led government demonetised notes of Rs 500 and Rs 1000 in November 2016, which also aimed to bring down the scale of fake notes in the system. However, the counterfeit instances among substituted notes of Rs 500 and Rs 2000 have also skyrocketed since their inception, says the latest RBI annual report. Fake notes among the new design notes of Rs 500 more than doubled with an increase of 121 per cent whereas those of Rs 2000 increased by 21.9 than the previous year during 2018-19, going by the report. Compared to the year of demonetisation, 2016-17, fake notes of Rs 500 and Rs 2000 has shot up by 43 and 34 folds respectively in 2018-19.
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More than 3 lakh counterfeit notes of different denominations have been detected in 2018-19, out of which 5.6 per cent were detected at the RBI and 94.4 per cent were detected by other banks. There has been an increase of 20.2 per cent, 87.2 per cent and 57.3 per cent in fake notes detected in the denominations of Rs 10, Rs 20 and Rs 50, respectively. In the denomination of Rs 200, 12,728 fake notes were detected as against 79 during the previous year.
To check the increase in fake notes the central bank generally use intaglio printing on notes which allows even the non-experts to easily spot forgeries. “We propose to focus on robust IP based technology for security features. Make in India can be one thing which will give better control over the processes to the government and thus curbing the counterfeit menaces in the industry which in turn will obviously contribute to PM’s vision of USD 5 trillion economy,” Nakul Pasricha, President, Authentication Solution Provider Association (ASPA) told Financial Express Online.
Increase in fake notes shoot up counterfeit money in the system, which reduces the value of real money. It also increases inflation, i.e price of the articles and commodities due to more supply of money in the country. Rise in fake notes in the system also reduces the acceptability of paper money as there is a higher chance that the trader or any individual will lose money if the banks detect or confiscate the fake notes. Also, the counterfeit currency is heavily used in the cross border infiltration activities.