Fake currency in circulation declines marginally

Counterfeit notes detected in the currency in circulation has marginally declined from eight out of every 10,000 notes two years ago to less than seven per 10,000 in 2010-11, data released by the Reserve Bank of India said on Thursday showed.

In the number of fake notes seized, there has been a rise of 8.5 per cent to 4.36 lakh notes in 2010-11 compared to just a little over 4 lakh in the previous year. Nearly 90 per cent of these notes were detected in bank branches using special machines.

The RBI said that various measures had been initiated to check this menace, from polymer notes to additional security features and sorting at banks. Further, the home ministry has agreed to designate at least one police station in a district to register cases of forged notes. Additionally, banks would designate an officer in each district to register cases with the police.

The reporting system for fake notes is also being updated. The home ministry has decided in principle to ask banks to register one first information report (FIR) at the designated police station for every one-four pieces of counterfeit currency found in a transaction. If there are five or more such notes, then separate FIRs would be filed.

"While several states have designated nodal police stations, simplification of reporting system is under consideration of the central government," RBI said in its annual report. At present, banks are required to impound counterfeit notes and send them to the police for lodging an FIR.

Over recent years, the flow of counterfeit notes has increased, and intelligence agencies have often blamed Pakistan for the menace. As a result, the government, RBI and banks have launched special drives to check fake notes.