Counterfeit Indian currency notes surfacing abroad: RBI

A Reserve Bank of India study on counterfeit notes has observed that such notes have also begun to surface abroad, keeping pace with the convertible currencies.

The study estimates that seizures of Indian counterfeit currency in the Swiss system for the last ten years have risen fast. From hardly one or two pieces in 2001, the number of notes seized was 1,144 in 2011. The comparable seizure for Swiss francs is 3,702 and of US dollars, 2,228.

But compared to the huge size of currency notes in circulation in India, the incidence of counterfeiting is naturally miniscule. Canada for instance has 1.7 billion pieces of currency note in circulation against 40 billion of India in 2007. It also points out that based on data from seizures as a base to analyse the extent of the problem, fake Indian notes were lesser compared with the Euro or the British pound.

The study suggests there could be about 3.9 lakh pieces of counterfeit notes, on an average, floating in the system as against about 56.74 billion pieces of notes in circulation (NIC) during 2007-08 to 2010-11.

"Prima facie, one may try to figure out that during 2007-08 to 2011-12, estimated 4.4 - 8.1 pieces counterfeit notes per million NIC were floating in the system," the study said.

Typically more counterfeits are concentrated in the high denomination currency notes like Rs 1,000 and Rs 500 notes. Proportion of Rs 1,000 counterfeits has increased from 0.12 per cent in 2003-04 to 5.17 per cent in 2007-08.

Over one-third of counterfeits detected in the banking channel in 2007-08 were in the denominations of Rs 500 and Rs 1,000, the RBI study said. Since then, the central bank has stopped issuing figures for denomination-wise seizures.

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