rbi
Published on 6 April 2025
Government Initiatives to Combat Fake Currency Circulation in India
Government of India Initiatives to Combat Fake Currency Circulation
Inquiry on Fake Currency Value Increase
Question Overview Dr. Sanjeev Kumar Singari raised several questions regarding the rise in fake currency value post-demonetization in 2016, seeking clarification on the current status and government actions.
Key Questions Include:
- Increase in the value of counterfeit notes since 2016.
- Statistics on the rise in the monetary value of seized counterfeit currency.
- Analysis of the implications of these trends.
- Details on government efforts and statistics from 2021.
- Justification of decreasing counterfeit banknote numbers.
Government Response
Assessment of Counterfeit Currency Trends
- The Reserve Bank of India (RBI) reported a decrease in the value of counterfeit notes detected in the banking system, which fell from ₹43.47 crores in 2016-17 to ₹8.26 crores in 2021-22. Detailed figures are as follows:
| Year | Value (in ₹) |
|---|---|
| 2016-17 | 43,46,75,710 |
| 2017-18 | 23,34,91,965 |
| 2018-19 | 8,23,59,960 |
| 2019-20 | 7,48,03,650 |
| 2020-21 | 5,45,00,125 |
| 2021-22 | 8,25,93,565 |
- The National Crime Records Bureau (NCRB) noted an increase in the value of seized fake currency, rising from ₹28.10 crores in 2017 to ₹92.18 crores in 2020. While seizures have increased, there is a trend indicating a reduction in counterfeit notes within the banking system, attributed to smuggling from neighbouring countries.
Government Actions Against Fake Currency
Proactive Measures To combat the circulation of FICN, the Government of India has implemented several strategies:
- Legislation: Enacted the Unlawful Activities (Prevention) Act, 1967.
- Establishment of Agencies: Formed the National Investigation Agency (NIA) as the primary agency for investigating high-quality FICN cases.
- Coordination and Intelligence Sharing: Constituted the FICN Coordination Group (FCORD) to enhance information sharing among state and central security agencies.
- International Cooperation: Developed a Joint Task Force with Bangladesh for cooperation to combat smuggling and circulation of fake currency. An MoU with Bangladesh has also been established for effective prevention measures.
Capacity Building and Training
- The government conducts training and capacity-building programs for law enforcement agencies at both central and state levels. Additionally, programs are organized for police officials from Nepal and Bangladesh regarding smuggling and counterfeiting of Indian currency.
Currency Features and Detection Training
The RBI has updated banknote security features, including a new numbering pattern introduced in 2015, which allows the public to distinguish between counterfeit and genuine notes easily. Details on these security features are available on the RBI website.
The RBI provides ongoing instructions to banks on safeguarding against fake notes and regularly conducts training sessions for bank personnel. A Master Circular on the detection and reporting of counterfeit notes was updated as of April 1, 2022, available in the public domain for broad awareness.
Decrease in Counterfeit Banknotes
Statistical Evidence The total number of counterfeit banknotes reduced significantly from ₹7.62 lakh pieces in 2016-17 to ₹2.09 lakh pieces in 2020-21, following the demonetization decision made on November 8, 2016. This decision aimed to address the proliferation of FICN effectively.
Conclusion
In summary, the data and government measures clearly indicate a strategic approach toward managing fake currency circulation in India. The collaboration of various agencies, both national and international, alongside legislative actions and public awareness initiatives, plays a vital role in curbing this issue. The documented decrease in the number of counterfeit banknotes post-demonetization further illustrates the effectiveness of these efforts.