Fake Rs 500 Notes In Circulation, Says RBI. Know What To Do When You Get One

Detection of fake currency note in Rs 500 zoomed 102 per cent in past one year, while 13,604 pieces of counterfeit notes of Rs 2,000 denomination detected in the system during FY21-22

There is a 42 per cent decline in fake notes detection from 2011-2016 (five years) to 2017-2022, RBI report said.

Source : Getty

New Delhi: The number of fake currency note of Rs 500 denomination detected by the banking system more than doubled to 79,669 pieces in FY21-22 over the previous year, data by the RBI showed.

According to the RBI Annual Report (2021-22), detection of fake currency note in Rs 500 saw a surge of 102 per cent in the past one year. A total number of 13,604 pieces of counterfeit notes of Rs 2,000 denomination detected in the system during FY21-22, up 54.6 per cent from the preceding financial year.

Detection of fake Rs 500 notes see a surge of 102 per cent

Year	Detection of Rs 500 counterfeit notes (No. in pieces)
2019-20	30,054
2020-21	39,453
2021-22	79,669
Rise in per cent from 2020 to 2021	102 per cent (2021 to 22)

Source: RBI

In the annual report, the central bank said, “Compared to the previous year, there was an increase of 16.4 per cent, 16.5 per cent, 11.7 per cent, 101.9 per cent and 54.6 per cent in the counterfeit notes detected in the denominations of Rs 10, Rs 20, Rs 200, Rs 500 (new design), and Rs 2,000, respectively.”

However, there is a 42 per cent decline in fake notes detection from 2011-2016 (five years) to 2017-2022 (five years). (See charts)

Year	Detection of counterfeit notes (in pieces)
Pre-demonetisation (2011 to 2016) - Total	27,35,052
2016 (Year of demonetisation)	7,62,072
Post-demonetisation (2017 to 2022) - Total	15,76,458
Decrease in percentage - Pre- and Post-demonetisation	42% decrease in pieces

Source: RBI

Counterfeit notes (Pre-demonetisation) 

Year	Detection of counterfeit notes in the banking system (No. of pieces)
2011-12	5,21,155
2012-13	4,98,252
2013-14	4,88,273
2014-15	5,94,446
2015-16	6,32,926
2016-17	7,62,072

Source: RBI

Counterfeit notes (Post-demonetisation) 

Year	Detection of counterfeit notes in the banking system (No. of pieces)
2017-18	5,22,783
2018-19	3,17,384
2019-20	2,96,695
2020-21	2,08,625
2021-22	2,30,971

Source: RBI

What is FICN?

Fake Indian Currency Note (FICN) is a term used by officials and media to refer to counterfeit currency notes circulated in the Indian economy.

What is the maximum punishment for the offence related to fake currency?

The maximum punishment for offences related to fake currency could be life imprisonment. Any attempt to circulate the counterfeit currency with the knowledge that it is fake, is punishable under IPC Section 489C, and can attract fine or imprisonment ranging from seven years to life imprisonment, or both.

What if you get fake note at ATM? How to get refund?

• After spotting fake currency notes, at the ATM, hold the counterfeit notes in front of the CCTV camera or you can show both the front and back sides of the note by holding it near the CCTV camera.
• Inform the security guard of the ATM about the fake note.
• Make sure that you have the receipt from the ATM of the above-mentioned transaction.
• Deposit the fake notes before the bank.
• The bank will follow the further procedure according to the rules.
• The customer will be given original note in lieu of fake note.
• Show the ATM transaction receipt to the bank.
• According to RBI guidelines, banks have to refund the customer as early as possible if fake notes come out from ATM. If this is not done, the RBI can take action against the bank concerned.

Impact of fake currency note

Circulation of large number of counterfeit notes in an economy may impact inflation. Besides, fake currency notes can also be used for illegal activities such as money laundering and terrorism.