Spate of fake currency flooding market: government

If a shopkeeper double-checks your Rs500 note, try not to get irritated – the fake currency floating around in the Indian market has risen by 400 per cent over just the past two years.

And over 60 per cent of these counterfeit notes are of the Rs500 denomination, says a report compiled by the Financial Intelligence Unit (FIU), an arm of the finance ministry.

The FIU report released today says that during the financial year up to March 2011, it detected "4,23,539 incidents of fake Indian currency notes with a face value of over Rs35 crore".

Such 'counterfeit currency transactions' (CCR) reports are sent by public and private sector banks to the FIU under provisions of the Prevention of Money laundering Act.

The extent of counterfeit currency notes being introduced into the country's banking and other financial sectors are supposed to be reported regularly; but many citizens – including this reporter – have for years been finding fake notes emerging from ATM machines, which are not subsequently reimbursed by the bank concerned.

"Private Indian banks contributed majority of CCRs,'' the FIU report to the finance ministry said.