Counterfeit rupee going increasingly global: RBI study

Counterfeit rupee notes are no more a problem affecting India alone, but is spreading worldwide along with its counterparts in the convertible currencies, a Reserve Bank of India (RBI) study on counterfeit notes has observed.

RBI cites the increase in the number of counterfeit Indian rupee notes seized by Swiss authorities over the last 10 years to show the rise in the volume of counterfeits in circulation.

The number of fake Indian currency notes seized Switzerland rose from barely one or two notes in 2001 to 1,144 in 2011 - a thousand-fold increase.

Against this, the number of Swiss francs seized there during 2011 stood at 3,702, while the number of US dollars seized were around 2,228.

This could be linked to increasing overseas transactions, both legal and illegal, say analysts.

This may also explain the dwindling foreign currency resources with the Reserve Bank of India.

Also, while most of the counterfeits are in the high denomination currency notes like Rs1,000 and Rs500 notes, the RBI study shows that nearly 56 per cent of the counterfeits were of Rs100 denominations.

The number of Rs1,000 counterfeits seized increased from 0.12 per cent in 2003-04 to 5.17 per cent in 2007-08.

Bank tellers are reported to have spotted 5.2 lakh fake notes in 2011-12 compared with 4.4 lakh notes in 2010-11.

RBI data show a 19.6-per cent increase in the number of counterfeit currency notes detected in 2011-12 over the previous year.

Around 3.9 lakh fake currency notes were filtered every year between 2007-08 and 2011-12, according to an RBI research paper.

However, the number of counterfeit currency notes seized in India is miniscule compared to the volume of currency in circulation in the country.

Against about 56.74 billion pieces of rupee notes in circulation in India between 2007-08 and 2010-11, the authorities have seized about 3.9 lakh counterfeit notes, on an average, floating in the system, according to RBI data.