Will The Withdrawal Of The Rs 2,000 Notes Have An Impact On The Fake Currency Industry?

The recent decision by the Reserve Bank of India to stop printing the Rs 2,000 note which was introduced post demonetisation has had mixed responses.

The RBI made it clear that the note would continue to be legal tender until September. The big question now is what this would do to the fake currency market, which had been printing the Rs 2,000 note and circulating in many parts of India. Fake currency has been a big draw for operatives in Pakistan and Bangladesh, which overseas the racket in India. In India, the main hub has been Malda in West Bengal, where the notes are printed and then circulated to various parts of the country.

An Intelligence Bureau official tells OneIndia that while this move may reduce hoarding of black money, on the fake currency front, the vigil still needs to be high. Home Ministry and NCRB data both suggest that counterfeiters had moved towards the Rs 500 note since 2020.

The Home Ministry had informed the Rajya Sabha in February 2022 that the number of seized counterfeit notes of the Rs 2,000 denomination had shot up fro 2,272 in 2016, the year of its introduction to 244,834 in 2020.

The NCRB data of 2021 shows that the number of fake Rs 2,000 notes seized during the year had reduced by over 75 per cent to 60,915 in 2021 as against the 244,834 in 2020. The data also suggests that the number of fake Rs 500 notes too had decreased from 215,474 in 2020 to 132,060 in 2021.

While the Rs 2,000 note has been in circulation, it was not widely used and hence the counterfeiters focused largely on the Rs 500 note.

An RBI report of May 2022 said that the number of fake notes of Rs 500 denomination detected by the banking system doubled from 30,054 pieces in 2019-20 to 79,669 pieces in 2021-22.

Fake currency would however continue to pose a challenge say officials. The highest amount of fake currency with the face value of Rs 92.17 crore was seized in 2020, while the lowest with the face value of Rs 15.92 crore was seized in 2016. In 2021 the value was at Rs 20.39 crore.

After declining in 2020-21, the total number of fake currency of all denominations detected in the banking sector increased to 2,30971 pieces from 2,08,625 pieces in the previous fiscal, data would show.

While the number of Rs 500 fake notes remained high, the counterfeiters did not focus much on the Rs 50 and Rs 100 notes. These denominations have. Declared by 28.7 per cent and 16.7 per cent respectively.