Study of Fake Indian Currency Notes and

assessing awareness of existing security features of bank notes

RBI Summer Placement Scheme 2023

(May – July 2023)

Summer Internship Project Report

by

Abhijeet Chakraverty

Institute of Management Studies

(Faculty of Management Studies)

Banaras Hindu University

Mentor: Shri Deepak Narang, DGM, Issue Department

Guided by: Smt. Sharda Meena, Manager, Issue Department

Faculty Mentors:

Prof. P.S. Tripathi

Dr. Rajkiran Prabhakar

 ACKNOWLEDGEMENT
I am extremely grateful to my organizational mentors Shri Deepak Narang, DGM, Issue
Department and guide Smt. Sharda Meena, Manager, Issue Department, Reserve Bank
of India, for the best guidance and close supervision.

This project would not have been completed without their valuable support and
contribution. They have consistently provided me with valuable advice, encouraged me
to explore new ideas, and challenged me to think critically. Their mentorship has not
only enriched my understanding of the subject but has also helped me develop crucial
research skills that will undoubtedly benefit me in my future endeavors.

I take this opportunity to also thank my Faculty Mentors, Prof. P.S. Tripathi and Dr.
Rajkiran Prabhakar, who have put a lot of effort to assist me in my project by guiding me
throughout. They have always been approachable and helpful and have been kind
enough to clarify all my doubts.

Sincerely,

Abhijeet Chakraverty
 CONTENTS
Page
Sl. TITLE
No.
1 Introduction 1
1.1 Currency 1
1.2 Indian Currency 1
1.3 Counterfeit note 4
1.4 History of counterfeit currency 5
1.5 Factors affecting counterfeit currency 8
1.6 Risks associated with Counterfeit Currency 14
2 Literature review 16
2.1 The Use and Counterfeiting of United States Currency Abroad 16
2.2 Australia's Plastic Banknotes: Fighting Counterfeit Currency 16
2.3 Counterfeiting and Inflation 17
2.4 Currency Counterfeiting in India: Looking for solutions 17
2.5 Estimation of Counterfeit Currency Notes in India 18
2.6 The Social costs of Currency Counterfeiting 18
3 Research methodology & design 19
3.1 Scope of the study 19
3.2 Hypotheses of the study 21
3.3 Analytical tools used in the study 22
Role of Reserve Bank of India and procedure of
4 23
impounding counterfeit currency
4.1 Functions of Currency Management 23
4.2 Security Features of Indian Currency Notes 25
4.3 Procedure of Impounding Counterfeit Currency 28
4.4 Legal Consequences of Counterfeiting in India 35
5 Steps taken to prevent the menace of counterfeiting 37
Indigenisation of raw material procurement and production
5.1 38
required for printing of currency notes
5.2 Conventional Techniques for detection of Counterfeit Currency 39
5.3 Technological innovations in Counterfeit Currency Detection 40
Touchpoints prone/ vulnerable to coming in contact with
5.4 41
Counterfeit Currency
6 Data analysis and interpretation 43
6.1 Trend of FICN Cases Reported 43
6.2 Trend of FICN Seized 48
6.3 Trend of FICN detected in the Banking System 62
6.4 Counterfeit Currency Reports 70
Relationship between counterfeit currency and currency in
6.5 72
circulation
6.6 Findings and Conclusions 75
 Page
Sl. TITLE
No.
Primary data analysis of the survey on “awareness of
7 77
existing security features of banknotes”
Relationship between awareness of security features of
7.1 92
currency notes and age
Relationship between awareness of security features of
7.2 93
currency notes and annual income
Relationship between awareness of security features and
7.3 94
gender
Relationship between awareness of security features and
7.4 95
familiarity with touch and feel of banknotes
Relationship between awareness of security features and
7.5 receiving communication or alerts from RBI regarding 96
counterfeiting prevention
Relationship between awareness of security features and ease
7.6 97
of identification of security features
7.7 Remarks of respondents 98
7.8 Qualitative findings 98
7.9 Findings and conclusions 99
8 Limitations of the study 101
9 Recommendations 102
10 References 104
11 Appendix 106
 1. INTRODUCTION
1.1 Currency

Currency is a medium of exchange that facilitates economic transactions and serves as

a store of value. It is a widely accepted form of money within a particular country or
region, used to facilitate the buying and selling of goods and services.

The concept of currency has been essential to human civilization for centuries, as it
enables the efficient exchange of goods and services between individuals and facilitates
economic activities. Currency systems have evolved over time, with various forms of
currency being used throughout history, including shells, beads, metal coins, and paper
money.

In modern times, most countries have adopted fiat currency, which is not backed by a
physical commodity like gold or silver but derives its value from the trust and confidence
of the people who use it. Fiat currency is issued and regulated by a central authority,
typically a central bank or monetary authority. In addition to physical currency in the
form of banknotes and coins, digital currencies have gained prominence in recent years.

Overall, currency is a fundamental component of modern economies, enabling

individuals and societies to engage in economic activities, conduct trade, and store
value. Its evolution and adaptation to changing technologies and economic systems
continue to shape the global financial landscape.

1.2 Indian Currency

The currency of India is the Indian Rupee (INR) and is issued and regulated by the
Reserve Bank of India (RBI), which is the country's central bank. The Indian Rupee is
denoted by the symbol "₹". The Reserve Bank of India currently issues banknotes in the
denomination of ₹10, ₹20, ₹50, ₹100, ₹200, ₹500.

The printing of notes in the denominations of ₹2 and ₹5 has been discontinued and
these denominations have been coinised as the cost of printing and servicing these
banknotes was not commensurate with their life. However, such banknotes issued
earlier can still be found in circulation and these banknotes continue to be legal tender.
Coins in India are presently being issued in denominations of 50 paise, one rupee, two
rupees, five rupees, ten rupees and twenty rupees. The coins and notes of
denomination ₹ 1 are issued by the Ministry of Finance, Government of India.

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Evolution of Indian Currency Notes

i. Ashoka Pillar Banknotes:

The first banknote issued by independent India was the one rupee note issued in 1949.
While retaining the same designs the new banknotes were issued with the symbol of
Lion Capital of Ashoka Pillar at Sarnath in the watermark window in place of the portrait
of King George.

The name of the issuer, the denomination and the guarantee clause were printed in
Hindi on the new banknotes from the year 1951. The banknotes in the denomination of
₹1000, ₹5000 and ₹10000 were issued in the year 1954. Banknotes in Ashoka Pillar
watermark series, in ₹10 denomination were issued between 1967 and 1992, ₹20
denomination in 1972 and 1975, ₹50 in 1975 and 1981, and ₹100 between 1967-1979.
The banknotes issued during the above period, contained the symbols representing
science and technology, progress, orientation to Indian art forms. In the year 1970,
banknotes with the legend "Satyameva Jayate", i.e., truth alone shall prevail were
introduced for the first time. In October 1987, ₹500, banknote was introduced with the
portrait of Mahatma Gandhi and the Ashoka Pillar watermark.

ii. Mahatma Gandhi (MG) Series 1996

Table 1: Banknotes introduced as a part of MG Series 1996

Denomination Month and year of introduction

₹5 November 2001
₹10 June 1996
₹20 August 2001
₹50 March 1997
₹100 June 1996
₹500 October 1997
All the banknotes of this series bear the portrait of Mahatma Gandhi on the obverse
(front) side, in place of symbol of Lion Capital of Ashoka Pillar, which has also been
retained and shifted to the left side next to the watermark window. This means that
these banknotes contain Mahatma Gandhi watermark as well as Mahatma Gandhi's
portrait.

iii. Mahatma Gandhi series – 2005 banknotes

MG series 2005 banknotes were issued in the denomination of ₹10, ₹20, ₹50, ₹100,
₹500 and ₹1000 and contain some additional/ new security features as compared to the
1996 MG series.

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The year of introduction of these banknotes is as under:

Table 2: Banknotes introduced as a part of MG Series 2005

Denomination Month and year of Introduction

₹50 and ₹100 August 2005
₹500 and ₹1000 October 2005
₹10 April 2006
₹20 August 2006
The legal tender of banknotes of ₹500 and ₹1000 of this series was subsequently
withdrawn w.e.f. the midnight of November 8, 2016.

iv. Mahatma Gandhi (New) Series (MGNS) – Nov 2016

The Mahatma Gandhi (New) Series, introduced in the year 2016, highlights the cultural
heritage and scientific achievements of the country. The banknotes in the series are
more wallet friendly, being of reduced dimensions and hence expected to incur less
wear and tear. For the first time, designs for banknotes has been indigenously
developed on themes reflecting the diverse history, culture and ethos of the country as
also its scientific achievements. The colour scheme is sharp and vivid to make the
banknotes distinctive.

The first banknote from the new series was introduced on November 8, 2016 and is a
new denomination, ₹2000-with the theme of Mangalyaan. Subsequently, banknotes in
this series in denomination of ₹500, ₹200, ₹100, ₹50, ₹20 and ₹10 have also been
introduced.

The decision to withdraw ₹ 2000 banknotes from circulation was taken by RBI on May
19, 2023.

Currency in circulation

Currency in circulation can defined as the total value of banknotes and coins that are in
the hands of the public and held as a medium of exchange. It includes the currency held
by individuals, businesses, banks, and other entities outside the central bank.

Currency in circulation represents the physical form of money that is used for daily
transactions within the economy. It is an important indicator of the liquidity and cash
demand in the country. The RBI closely monitors the currency in circulation as part of its
monetary policy and monetary control measures.

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1.3 Counterfeit note

A suspected forged note, counterfeit note or fake note is any note which does not
possess the characteristics of genuine Indian currency note. A forged note can be
identified on the basis of the security features which are present in a genuine Indian
currency note. These features are easily identifiable by seeing, touching and tilting the
note.

Counterfeiting banknotes/ using as genuine, forged or counterfeit banknotes/

possession of forged or counterfeit banknote/ making or possessing instruments or
materials for forging or counterfeiting banknotes/ making or using documents
resembling banknotes are offences under Sections 489A to 489E of the Indian Penal
Code and are punishable in the Courts of Law by fine or imprisonment ranging from
seven years to life imprisonment or both, depending on the offence.

Mere possession of a forged note does not attract punishment. Possession of any
forged or counterfeit banknotes, knowing or having reason to believe the same to be
forged or counterfeit and intending to use the same as genuine or that it may be used
as genuine, is punishable under Section 489C of Indian Penal Code, 1860.

In 2022, there were about eight counterfeit notes per million notes in circulation in
Australia and about six in Canada. In Switzerland, there were fifteen counterfeit notes
per million notes in circulation, compared to a low of 0.28 in Germany (2022). In India,
the number of counterfeit notes per million notes in circulation was two which includes
counterfeit notes detected by banks and those discovered in remittances received by
The Reserve Bank of India during 2021–2022.

The Reserve Bank of India has been organizing training sessions on the authentication
of banknotes security features for people handling significant amounts of cash like
banks/ consumer forums/ merchant associations/ educational institutions/ police
professionals. Apart from the training sessions, information on security features of
banknotes is also available on RBI’s website.

The Reserve Bank’s role in addressing the problem of counterfeiting lies in improving
the security features of the currency notes, putting in place a system where all fake
notes making entry into the banking channel are promptly detected, and raising public
awareness levels.

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1.4 History of counterfeit currency

It is believed that Counterfeiting is as old as the existence of money itself. The major
reason behind counterfeiting has been personal gains apart from being used as a
political weapon in the past to destabilize the economy of rival nations.

Cowrie shells being used during 3300 – 2000 BC are one of the earliest forms of
currency which were counterfeited using ivory, bone, clam shell, stone and bronze.

History of counterfeiting of coins

Greek coins were counterfeited by using a layer of less valuable metal over a layer of
precious metal or by preparing moulds of low value genuine copper coins filled with
molten metals during 400 BC. As a result of increase in such counterfeiting practices,
Official coin testers were employed to weigh and cut coins followed by checking the
metal at the core.

Edges of genuine silver coins were gradually shaved or clipped and the matter collected
over a period was melted and used to produce counterfeit coins in England. This led to
a reduction in weight of genuine coins by half during the 17 th century with a counterfeit
coin circulation rate of 10 % of the total coins in circulation. Sir Isaac Newton, warden of
the Royal Mint of England at that time identified the lead counterfeiter who had
produced counterfeit coins worth £30,000 followed by recalling and reminting of all
British coins.

History of counterfeiting of banknotes

In the Song dynasty of China, “Jiaozi” are believed to be some of the first banknotes to
be issued with sophisticated designs, seals, stamps, signatures and colours on special
papers to prevent counterfeiting during 1005 AD.

Lack of standardization of notes i.e., proliferation of different varieties of notes issued by

various private banks during 1800s in Australia, made it difficult for the public to
recognize genuine currency notes which was exploited by counterfeiters to convert low
value or worthless notes into higher value notes. As a result, the sole authority to issue
notes was taken over by the government owned Commonwealth Bank in order to
standardize Australian banknotes in 1920.

Forgery of $ 10 note worth $ 1 million with a counterfeit currency circulation rate of

thousand parts per million was reported in Australia in 1966 and it was termed as Times
Bakery Counterfeiting incident due to the identification of counterfeit currency on the

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basis of improper lines observed on the portrait of Times Bakery building (Figure 1)
which are absent in the genuine $ 10 note (Figure 2).

Figure 1: A Times Bakery counterfeit $ 10 note in Australia

Figure 2: Genuine $ 10 note of Australia

(Source: A brief history of Currency Counterfeiting, Reserve Bank of Australia)

In 1970s, £20 counterfeit notes of high-quality worth £50 million were produced in Essex
which in some cases was not detected even by the banking system.

After fighting the Civil War in 1991, Somalia was left with no government for two
decades. Counterfeiters exploited people’s need for a means of exchange during this
period as a result of which 95 % of local currency in circulation were found to be
counterfeit Somali shillings.

Page | 6
Use of counterfeiting as a political weapon

During the American war for independence (1775 – 1783), the Britishers manufactured
and distributed counterfeits of continental currency in New York leading to devaluation
of the currency due to uncertainty about genuineness and increasing money supply.

During World War II, two secret Operations (Operation Andreas and Operation Bernard)
to deploy counterfeit pounds and create hyperinflation were targeted at the British
economy by Nazi Germany, but later was used to purchase supplies for the war. In
response to this, British authorities ceased issuing of denominations greater than 5
pounds.

History of counterfeit currency in India

One of the oldest recorded counterfeiting cases of currency in India dates back to the
British colonial era. The case involved counterfeit coins known as "Mohurs" during the
18th century which were produced in mints established in Calcutta (now Kolkata) by the
British East India Company.

Counterfeiters started producing fake Mohurs that resembled the genuine coins minted
by the British using base metals and gold-plating to imitate the appearance of the
original Mohurs.

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1.5 Factors affecting counterfeit currency

The issues arising from counterfeit currency are multifaceted, and addressing them
requires a comprehensive approach involving political, legal, law enforcement, and
economic measures.

Political factors affecting counterfeit currency

The political climate and law enforcement capabilities play a crucial role in curbing
counterfeiting activities originating from organized crime syndicates and counterfeiters
operating from specific regions or countries. The control of borders, particularly along
India's neighboring countries, is vital in preventing the inflow of counterfeit currency.

Cooperation with international organizations, such as Interpol, diplomatic relations with

other countries, participation in treaties and conventions related to counterfeiting and
border security measures can enhance the effectiveness of efforts to combat fake
currency. Adequate allocation of Government’s resources, coordination between
various agencies, enacting effective legislation and implementing strong enforcement
measures play a significant role in tackling the issue.

Political factors affecting reporting of counterfeit currency

Creation of an environment where reporting of Counterfeit currency is encouraged and

supported can be achieved through effective law enforcement, public awareness
campaigns and a strong commitment to combating counterfeiting at the political level.

Individuals need to be assured of protection against retaliation or legal consequences

upon reporting counterfeit currency, which would ease the reporting procedure and
make it more likely for individuals to come up with information about counterfeit
currency.

Political factors influencing awareness of security features of banknotes

It is important for the Government to prioritize and invest in campaigns and initiatives to
raise awareness about the security features, their significance, and ways to identify
genuine currency which can enhance public understanding and vigilance in identifying
counterfeit currency resulting in maintenance of trust in the currency and strengthening
of the economy.

Adequate resource allocation and budgetary considerations for educational programs,

training for law enforcement agencies, and printing of informative material can

Page | 8
contribute to increased awareness of security features of banknotes. Political decisions
on education policies can help in prioritizing and integrating financial literacy and
awareness of security features of banknotes into the education system.

Economic factors affecting counterfeit currency

High inflation rates, economic instability (recessions or financial crises) and currency
devaluation (decrease in value of the legitimate currency) can create an environment
conducive to counterfeiting. Economies that heavily rely on cash transactions need to
be more vigilant against counterfeit currency as it may infiltrate the economy and go
unnoticed in the absence of robust systems for detection and reporting. Counterfeiters
often target high denomination currency notes as they offer larger profits per note.

Countries with large informal or unregulated economies may face higher rates of
counterfeit currency circulation since transactions are less traceable and oversight is
limited, leading to economic instability. International trade and globalization have
influenced the circulation of counterfeit currency as countries with significant cross-
border trade or those serving as transit hubs for goods and services may experience
higher inflows of counterfeit currency due to the movement of illicit funds across
borders.

Economic factors affecting reporting of counterfeit currency

The economic impact of counterfeit currency on individuals and businesses can

influence their decision to report such incidents. If the financial loss resulting from
counterfeit currency is significant, individuals and businesses are more likely to report it
to minimize their losses and seek legal remedies.

Economic factors affecting awareness of security features of banknotes

Countries with higher levels of economic development generally invest more in the
production and distribution of banknotes with advanced security features. As economies
develop, there is often an increased emphasis on educating the public about these
features to mitigate the risk of counterfeiting.

In economies where cash transactions are more prevalent, there is generally a greater
focus on educating the public about security features to mitigate counterfeiting risks.
Balancing the costs of implementing advanced security features against the potential
economic losses from counterfeiting is another important economic consideration.

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Social factors affecting counterfeit currency

The level of awareness and education among the general population about counterfeit
currency can significantly impact its circulation. Access to information, financial literacy,
and participation in public awareness campaigns can contribute to increased vigilance
and knowledge of security features, making it more difficult for counterfeit currency to go
undetected. Greater trust of individuals in currency and financial institutions is
warranted, for being cautious and reporting suspected counterfeit notes in order to
safeguard the integrity of the monetary system.

The influence of peers and social networks can be used to discourage the use of
counterfeit notes and encouraging reporting, fostering a culture of vigilance and
accountability, reducing the likelihood of counterfeit currency being circulated. Public
awareness campaigns that highlight the legal consequences and social repercussions
of counterfeit currency can act as a deterrent to its circulation. Individuals with lower
incomes or limited access to formal financial services may be more vulnerable to
counterfeit currency and less likely to report it due to lack of awareness, resources, or
fear of legal consequences.

Social factors affecting reporting of counterfeit currency

Limited awareness about the prevalence and consequences of counterfeit currency can
hinder reporting. If individuals are not aware of the signs and methods to detect
counterfeit notes, they may not realize that they have encountered fake currency or
understand the importance of reporting it.

Social factors affecting awareness of security features of banknotes

The level of education and literacy in a society can influence the awareness of security
features. Higher education levels and literacy rates generally correlate with greater
awareness and understanding of complex security features on banknotes. If individuals
have access to educational materials, public campaigns, or online resources that
explain the security features of banknotes, it can contribute to increased awareness.

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Technological factors affecting counterfeit currency

Technological advancements in printing technology have made it easier for

counterfeiters to produce high-quality counterfeit banknotes. The availability of powerful
digital image editing software allows counterfeiters to manipulate and alter images,
making it easier to create counterfeit banknotes that resemble genuine ones.

On the other hand, technological advancements have also improved the security
features embedded in banknotes. Advanced security features, such as holograms,
microprinting, color-shifting inks, and security threads, make it more difficult for
counterfeiters to reproduce banknotes accurately. Technological advancements have
led to the development of sophisticated counterfeit detection devices. Devices such as
UV (ultraviolet) lights, infrared scanners, magnetic ink detectors, and automated
currency analyzers use advanced technology to identify counterfeit banknotes based on
specific security features.

The rise of digital currency and electronic payment systems has reduced the reliance on
physical cash, making it challenging for counterfeiters to operate. The incorporation of
cutting-edge technologies, such as micro-optics, nanotechnology, and machine-
readable features, can enhance the authenticity and difficulty of counterfeiting.

Technological factors affecting reporting of counterfeit currency

Technological advancements in digital imaging and scanning devices have made it

easier for individuals to capture images or scan banknotes suspected to be counterfeit.
High-resolution cameras, smartphones, and scanners allow people to document and
provide evidence of counterfeit currency incidents more effectively. The development of
mobile applications and online reporting platforms can facilitate the reporting process.

Social media platforms and online communities provide channels for individuals to
share their experiences, seek advice, and report incidents of counterfeit currency.
These platforms allow for the rapid dissemination of information, raising awareness, and
encouraging others to report similar incidents.

Advanced digital watermarking and tracking technologies embedded in banknotes can

facilitate the identification and tracking of counterfeit currency. These technologies can
enable authorities to trace the origin and movement of counterfeit notes, aiding in the
detection and prevention of counterfeiting activities.

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The application of machine learning algorithms and data analytics techniques can assist
in analyzing patterns, identifying trends and detecting counterfeit currency. Automated
systems can process large volumes of data, flag suspicious transactions and identify
potential counterfeit note circulation networks.

Technological factors affecting awareness of security features of banknotes

The widespread availability of digital media and online resources has made it easier for
individuals to access information about security features. Official websites, educational
videos, interactive tutorials, and online forums provide platforms for people to learn
about the security features of banknotes conveniently.

Mobile applications and augmented reality (AR) technology can enhance awareness of
security features. Mobile apps designed specifically for educating users about banknote
security features use AR to provide interactive experiences, allowing individuals to
explore and learn about various security elements. Internet of Things (IoT) devices,
such as smart devices and wearables, can contribute to the awareness of security
features. For example, connected devices equipped with counterfeit detection
capabilities or sensors that can authenticate banknotes can help individuals become
more familiar with the security features and their significance.

Digital communication channels and social media platforms play a crucial role in
disseminating information about security features. Official accounts of financial
institutions, law enforcement agencies, and central banks can share educational
content, images, and videos to raise awareness among a wide audience.

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Legal factors affecting Counterfeit currency

Governments establish specific laws that make counterfeiting illegal. These laws
typically define counterfeiting, prescribe penalties for offenders, and outline the legal
consequences associated with the production, possession, distribution, or use of
counterfeit currency. Governments may require financial institutions, businesses, and
individuals to employ certain counterfeit detection measures. These regulations may
mandate the use of specific equipment or techniques for verifying the authenticity of
currency, such as ultraviolet (UV) light detectors, counterfeit detection pens, or
automated currency scanning machines.

Governments allocate resources to law enforcement agencies responsible for

investigating counterfeit currency cases. The effectiveness of these agencies in
detecting, apprehending, and prosecuting counterfeiters is influenced by legal factors
such as the availability of specialized units, training programs, and collaboration with
international counterparts.

Governments impose financial transaction regulations to monitor and control the

movement of money. These regulations, such as anti-money laundering (AML) and
know-your-customer (KYC) requirements, can indirectly help detect and deter
counterfeit currency activities.

Legal factors affecting reporting of Counterfeit currency

Legal provisions to safeguard protection and provision of incentives for individuals who
report counterfeit currency along with ensuring the confidentiality of their identity can be
instrumental in encouraging reporting. This is because individuals may be hesitant to
report incidents if they fear being implicated or facing legal repercussions themselves.
Protecting the identity of those reporting counterfeits can help alleviate concerns about
potential negative consequences or retaliation.

Legal factors affecting awareness of security features of banknotes

Governments can establish legal requirements for education and training programs on
banknote security features. Financial institutions, such as banks, may be obligated to
provide training to their employees to ensure they can identify counterfeit banknotes
and educate their customers about security features. Similarly, businesses that handle

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cash transactions could be required to train their employees on security features of
banknotes.

1.6 Risks associated with Counterfeit Currency

Counterfeiting undermines the economy by creating an illicit market that erodes the
value of genuine currency. As counterfeit notes enter circulation, they dilute the
purchasing power of legitimate money. This can lead to inflationary pressures, as the
increased money supply reduces the value of each unit of currency, ultimately impacting
prices and the overall economy, loss of confidence in the currency, and reduced trust in
the financial system which would negatively affect economic growth, investment, and
overall financial stability.

Counterfeit currency creates distortions in the effectiveness of monetary policy. Central

banks use various measures, such as controlling interest rates and money supply, to
manage inflation, stimulate economic growth, and maintain price stability. However, the
presence of counterfeit currency complicates these efforts, as it introduces additional
money into the system that is not accounted for in policy calculations. This can result in
a slowdown in economic activity, leading to lower investment, reduced business
expansion, and potential job losses.

Individuals and businesses can suffer financial losses when they unknowingly accept
counterfeit currency. Once counterfeit notes are detected, they are typically rendered
worthless, resulting in a direct financial loss for the recipient. Businesses may also incur
costs associated with implementing counterfeit detection measures and investigating
counterfeit incidents. Counterfeit currency can also affect a nation's international trade.
If counterfeit notes are unknowingly used in cross-border transactions, it can lead to
disputes, loss of trust between trading partners, and damage to international business
relations. Counterfeit currency can also harm a country's reputation and make it more
difficult for legitimate businesses to operate globally.

Engaging in counterfeiting activities is illegal and punishable by law. Individuals involved

in counterfeiting can face criminal charges, including imprisonment and fines.
Businesses or individuals unknowingly circulating counterfeit currency may also face
legal consequences, although they may be able to present a valid defense if they can
demonstrate reasonable precautions were taken.

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Governments bear the cost of combating counterfeiting through the allocation of
resources for security enhancements, law enforcement efforts, and public awareness
campaigns. These expenses place an additional financial burden on governments,
diverting resources that could be used for other essential services and programs.

Counterfeiting is often linked to organized crime networks. Counterfeit money acts as a

means to conceal and legitimize the proceeds of criminal enterprises. The profits
generated from counterfeiting activities can be used to finance other illegal activities,
such as drug trafficking, human trafficking, and terrorism. By unknowingly accepting
counterfeit currency, individuals may inadvertently contribute to these criminal
enterprises. By flooding the market with counterfeit currency, organized crime networks
undermine the integrity and trust in the financial system. The resulting economic
consequences can weaken governments and create social unrest.

Counterfeit currency enables organized crime networks to engage in illicit trade. They
can use counterfeit money to purchase goods and services, including illegal drugs,
weapons and other restricted items. Organized crime networks may integrate
counterfeit money into legitimate business transactions, mixing it with legal funds to
make the illicit proceeds appear legitimate. This process helps criminals disguise the
origin of their illicit funds and integrate them into the formal economy.

Organized crime networks take advantage of technological advancements and

vulnerabilities in currency design to produce high-quality counterfeit notes. They invest
in sophisticated printing techniques, equipment, and materials to replicate security
features, making it harder for individuals and businesses to detect counterfeit currency.

Counterfeit currency operations often involve cross-border networks, as criminals take

advantage of differences in currency design and security features across countries.
They establish complex networks for manufacturing, distribution, and money laundering,
making it challenging for law enforcement agencies to track and dismantle these
criminal enterprises.

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 2. LITERATURE REVIEW
2.1 The Use and Counterfeiting of United States Currency Abroad

United States Treasury Department

According to this report, most of the counterfeiting of US Dollars is prevalent outside of

the United States due to large proportion of US Dollars being used worldwide as a store
of value and medium of exchange. Overseas banks and law enforcement agencies
along with financial organizations are interested in developing expertise and
establishing coordination to increase detection and help in suppressing counterfeiting of
currency. The incidence of counterfeiting of new design notes with easier authentication
of notes without special equipment is dramatically lower than older design notes. It has
been emphasized upon quick response from law enforcement agencies in investigation
of counterfeiting cases in order to successfully prevent them from circulation. Extended
Custodial Inventory program initiated by Federal Reserve Bank of New York along with
International Currency Awareness Program of US Treasury can be used to detect which
countries are the first to detect counterfeits to respond quickly and strategically. Public
Education Resource Kit and Global Information Center were established for effective
communication and educational program regarding security features of currency notes.

2.2 Australia's Plastic Banknotes: Fighting Counterfeit Currency

Emma L. Prime and David H. Solomon

The paper describes the adoption of polymer banknotes in Australia as a measure to

combat counterfeit currency and highlights the advantages of polymer banknotes,
including their durability, enhanced security features, and cost-effectiveness. Polymer
banknotes are made from a flexible and transparent polymer film, providing improved
resistance to wear and tear compared to traditional paper notes.

The advanced security features incorporated into polymer banknotes, such as

transparent windows, holograms, and intricate printing techniques make counterfeiting
more challenging and enable the public to quickly authenticate the currency. The
durability, advanced security features, and reduced counterfeiting rates have ensured

Page | 16
smooth adoption of polymer banknotes in Australia, along with maintenance of trust in
the currency system.

Page | 17
2.3 Counterfeiting and Inflation

Cyril Monnet, European Central Bank

This paper examines the relationship between counterfeiting and inflation and
emphasizes the importance of investing in anti-counterfeiting measures to maintain
price stability. The paper highlights the implications of counterfeiting on trade and
welfare. It demonstrates that counterfeiting can have detrimental effects on price
stability and argues for the implementation of effective anti-counterfeiting measures and
technologies to detect counterfeit notes. This is because an increase in the money stock
due to counterfeiting leads to a decrease in the value of money, resulting in higher
prices for goods and services. In contrast, when the cost of counterfeiting is higher,
inflationary pressures are reduced, and price stability is maintained. By improving the
detection of counterfeits, inflationary pressures can be mitigated and welfare can be
maximized.

2.4 Currency Counterfeiting in India: Looking for solutions

Vaishali Kant, Galgotias Journal of Legal Studies

This article discusses the issue of currency counterfeiting in India and the seriousness
of counterfeiting as a criminal offense, as it poses a threat to the economy and can lead
to an increase in prices. The article explains that in order to convict individuals involved
in counterfeiting, it is necessary to prove their intention or mens rea. This can be
inferred from the facts and circumstances of the case or from the accused's actions.
The article also mentions that different countries have their own legislation on currency
counterfeiting, such as the special act in the US and the Forgery and Counterfeiting Act
in the UK.

The article suggests several measures to prevent currency counterfeiting. These

include enacting comprehensive legislation, establishing a proper investigative agency,
reducing the amount of cash in circulation, adopting sophisticated detection
technologies, encouraging fair reporting, advancing printing technology, and promoting
vigilance among citizens.

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2.5 Estimation of Counterfeit Currency Notes in India – Alternative Methodologies

Sanjay Bose and Abhiman Das, RBI Working Paper Series 2013

This paper discusses alternative methodologies for estimating the stock of counterfeit
currency notes in India. The review emphasizes the importance of maintaining public
confidence in bank notes and the need to stay ahead of counterfeiters. It explores the
effectiveness of anti-counterfeiting strategies and the implications for policies against
counterfeiting. It then discusses the extent of counterfeiting in India based on data from
the banking system. The review concludes by highlighting the increasing share of high
denomination counterfeit currency in India.

The authors propose a probability model approach using inverse sampling techniques
and the negative binomial distribution which can capture regional variations in
counterfeits and provide an estimate of counterfeit notes in circulation, as well as an
error estimate. Inverse sampling is a model-based method used to estimate the
proportion of units with a specific attribute, such as counterfeit notes. The paper
describes the probability distribution and calculations involved in inverse sampling. It
also mentions the limitations of inverse sampling and suggests alternative ratio-based
estimation methods.

2.6 The Social costs of Currency Counterfeiting

Nathan Viles, Alexandra Rush and Thomas Rohling, Reserve Bank of Australia

According to this paper, Counterfeiting can have several types of social costs. First,
there is the direct cost of counterfeiting, which includes the resources spent on
prevention, detection, and prosecution of counterfeiting operations. Second, there is the
loss of confidence in the currency, which can lead to a decline in the overall demand for
banknotes. This can result in reduced revenue from seigniorage for currency issuers.
The decrease in seigniorage revenue may require more taxation, potentially affecting
the level of output in the economy.

Additionally, a loss of confidence in the currency can also influence people's choice of
payment methods. If the demand for banknotes declines, individuals may substitute
cash with other payment types. If the social costs of conducting a transaction with these
alternative payment methods are higher, it can contribute to deadweight loss, which
shall lead to economic inefficiency.

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 3. RESEARCH METHODOLOGY & DESIGN
Research methodology is the specific procedures or techniques used to identify, select,
process, and analyze information about a topic. In a research paper, the methodology
section allows the reader to critically evaluate a study's overall validity and reliability.

3.1 Scope of the study:

This research is focused on analyzing the trend of Fake Indian Currency Notes (FICN)
across districts and states of India with focused attention towards districts under
jurisdiction of RBI, Kanpur. The analysis has also taken into account analysis of the
trend of Fake Indian Currency notes in districts of Uttar Pradesh and Uttarakhand
separately. The analysis of reporting of FICN cases by public sector and private sector
banks has also been carried out along with interpretation of results obtained through a
survey on assessment of awareness of existing security features of banknotes.

Objectives of the study:

1. To analyze the state and district wise trend of Fake Indian Currency Notes in India.

2. To analyze the sector wise reporting of Fake Indian Currency Notes by banks in
India.

3. To study the relationship between counterfeit currency and currency in circulation.

4. To assess the awareness of existing security features of banknotes through a sample

case study.

Sources of the study:

In this study, both primary and secondary data sources have been used.

Primary data:

These are the data that are collected for the first time by a researcher for a specific
purpose. Primary data are ‘pure’ in the sense that no statistical operations have been
performed on them yet and they are original.

With the help of a questionnaire, information would be collected regarding awareness of

consumers about existing security features in Indian currency notes. It would consist
data related to demographics (Age, Gender, Education, Income level), awareness levels
(Knowledge about security features, sources of information) and feedback. It shall
include pilot testing for data collection in order to administer changes requisite for data
collection and removing errors.

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 Primary data will help in answering the following questions:

i. What is the awareness level regarding existing security features of banknotes?

ii. What is the preferred mode to disseminate information and create awareness?

Secondary data:

They are the data that are sourced from someplace that has originally collected it. This
means that this kind of data has already been collected by some researchers or
investigators in the past and is available either in published or unpublished form. This
information is impure as statistical operations may have been performed on them
already.

The following sources have been used to collect secondary data:

1. Evaluation of the annual and bulletin reports of Reserve Bank of India

2. Data available on the National Crime Records Bureau Database

3. Annual reports of the following countries: Australia, Canada, Switzerland and

Germany

4. Annual report of Financial Intelligence Unit, India

 Secondary Data will help in answering the following questions:

i. Which year the volume and value of FICN detected in the banking system was
highest?

ii. Which year the volume and value of FICN seizure was highest?

iii. Which year the cases of FICN reported was the highest?

iv. What are the denomination-wise trends of FICN?

v. Which state/ district has the highest volume and value of FICN reported?

vi. Which sector of banking is the major source of Counterfeit currency reports?

Page | 21
3.2 HYPOTHESES OF THE STUDY:

Hypothesis 1:

(H0) Null hypothesis: There is no statistically significant relationship between counterfeit

currency and currency in circulation.

(H1) Alternate hypothesis: There is a statistically significant relationship between

counterfeit currency and currency in circulation.

Hypothesis 2:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and age.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and age.

Hypothesis 3:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and annual income.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and annual income.

Hypothesis 4:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and gender.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and gender.

Hypothesis 5:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and familiarity with touch and feel of currency
notes.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and familiarity with touch and feel of
currency notes.

Page | 22
Hypothesis 6:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and receiving communication or alerts from RBI
regarding counterfeiting prevention.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and receiving communication or alerts
from RBI regarding counterfeiting prevention.

Hypothesis 7:

(H0) Null hypothesis: There is no statistically significant relationship between awareness

of security features of currency notes and ease of identification of security features.

(H1) Alternate hypothesis: There is a statistically significant relationship between

awareness of security features of currency notes and ease of identification of security
features.

3.3 Analytical tools used in the study:

Regression analysis

Regression analysis is a statistical method used to model the relationship between a

dependent variable and one or more independent variables. It aims to understand how
changes in the independent variables are associated with changes in the dependent
variable. The dependent variable is the variable of interest or the outcome being
predicted or explained, while the independent variables are the factors or predictors
believed to influence the dependent variable.

Chi-square test for independence

A chi-square statistic is a measure of the difference between the observed and
expected frequencies of the outcomes of a set of events or variables. Chi-square test
for independence can be used to test whether two variables are related or independent
from each other.

Page | 23
 4. ROLE OF RESERVE BANK OF INDIA

AND PROCEDURE OF IMPOUNDING COUNTERFEIT CURRENCY

4.1 Functions of Currency Management

The Department of Currency Management has the responsibility of performing the

functions of currency management which is a core function of the Reserve Bank of India
under the RBI Act, 1934 which deals with issue of notes and coins and retrieval of unfit
notes from circulation.

Functions of the Department of Currency Management:

i) Designing and printing of banknotes: Banknotes are printed at four currency presses,
two of which are owned by the Government of India through its corporation, Security
Printing and Minting Corporation of India Ltd. (SPMCIL) and two are owned by the
Reserve Bank, through its wholly owned subsidiary, Bharatiya Reserve Bank Note
Mudran Private Ltd. (BRBNMPL). The currency presses of SPMCIL are at Nasik
(Western India) and Dewas (Central India). The two presses of BRBNMPL are at
Mysuru (Southern India) and Salboni (Eastern India).

Coins are minted in four mints owned by SPMCIL. The mints are located at Mumbai,
Hyderabad, Kolkata and Noida. The coins are issued for circulation only through the
Reserve Bank of India in terms of Section 38 of the RBI Act.

ii) Forecasting demand for notes and coins: The Reserve Bank of India, in consultation
with the Central Government and other stake holders, estimates the quantity of
banknotes that are likely to be needed denomination-wise in a year and places indents
with the various currency printing presses for supply of banknotes

iii) Ensuring smooth distribution of banknotes and coins throughout the country: To
facilitate the distribution of banknotes and rupee coins, the Reserve Bank of India has
authorized select scheduled banks to establish currency chests. These are storehouses
where banknotes and rupee coins are stocked on behalf of the Reserve Bank of India
for distribution to bank branches in their area of operation.

Some banks are authorized to establish Small Coin Depots to stock and distribute small
coins i.e., coins of value below Rupee One to bank branches in their area of operation.

As on March 31, 2023, there were 2,838 Currency chests and 2,293 Small coin depots.

Page | 24
iv) Retrieval of unfit notes and uncurrent coins from circulation: The Reserve Bank of
India in terms of its clean note policy, provides good quality banknotes to the members
of public. With this objective in view the banknotes received back from circulation are
examined and those fit for circulation are reissued while the others (soiled and
mutilated) are destroyed so as to maintain the quality of banknotes in circulation.

v) Ensuring integrity of banknotes: Reserve Bank of India, like other central banks over
the world, changes the design of banknotes from time to time. These notes contain
distinct easily recognizable security features to facilitate the detection of genuine notes
and prevent forgeries.

vi) Administering Note Refund: The Reserve Bank of India has been extending facilities
to the public for exchanging cut and mutilated notes at all its Issue Offices and bank
branches. Moreover, the facility for exchange of soiled, mutilated and imperfect notes is
to be provided by all banks at all their branches. This is a duty that the banking system
as a whole owes to the public. It needs no emphasis that the object of simplification of
RBI Note Refund Rules and its extension is to help members of the public to exchange
the cut/ mutilated notes in their possession without difficulty.

vii) Dissemination of information on currency related matters to the general public: The
Reserve Bank of India has been organizing training sessions on the authentication of
banknotes security features for people handling significant amounts of cash like banks/
consumer forums/ merchant associations/ educational institutions/ police professionals.
Apart from the training sessions, information on security features of banknotes is also
available on the Bank’s website.

Page | 25
4.2 Security Features of Indian Currency Notes

Watermark

The ₹ 10, ₹ 20, ₹ 50, ₹ 100, ₹ 200 and ₹ 500 notes contain the
Mahatma Gandhi watermark with a light and shade effect and multi-
directional lines in the watermark window. The MG 2005 series
banknotes had the watermark window at the left on the obverse side
while the MG New Series banknotes introduced in the year 2016
have the watermark window at the right on the obverse side.

New Numbering Pattern

The numerals in both the number panels of

the banknotes are in ascending size from
left to right while the first three alpha-
numeric characters (prefix) will remain
constant in size.

Security Thread

The ₹ 10, ₹ 20, ₹ 50, ₹ 100, ₹ 200 and ₹ 500 notes contain a readable, fully
embedded windowed security thread with the inscription ‘Bharat’ (in Hindi),
and ‘RBI’ but totally embedded on the reverse. When held against the light,
the security thread can be seen as one continuous line and consists of colour
changing ink from green to blue which can be noticed upon tilting. The
security thread appears to the right of Mahatma Gandhi's portrait in the MG
New Series banknotes. Notes issued as a part of the MG 2005 series had
the Security thread on the left of Mahatma Gandhi’s portrait.

Latent Image

On the obverse side of ₹ 100, ₹ 200 and ₹ 500 notes, a

horizontal band on the left side of the Mahatma Gandhi’s portrait
contains a latent image showing the respective denominational
value in numeral. The latent image is visible only when the note
is held at 45-degree angle at the eye level.

Page | 26
Microlettering

This feature appears within the portrait of Mahatma Gandhi. It

contains the word ‘India’ and ‘Bharat’ (in Hindi) in the ₹ 10, ₹ 20, ₹
50, ₹ 100, ₹ 200 and ₹ 500 notes. This feature can be seen better
under a magnifying glass.

Intaglio Raised Printing

The portrait of Mahatma Gandhi, the Reserve Bank seal,

guarantee and promise clause, Ashoka Pillar Emblem on
the right, RBI Governor's signature are printed in intaglio
i.e., in raised prints, which can be felt by touch.

Angular Bleed Lines

Angular Bleed Lines have been introduced in banknotes - 4

lines in 2 blocks in ₹100, 4 angular bleed lines with two circles
in between in ₹200 and 5 lines in 3 blocks in ₹500. In addition,
the size of the identification marks in denominations ₹100 and
₹ 500 ₹ 200 ₹ 100
above have been increased by 50 percent.

Identification Mark

A special feature in intaglio has been

introduced on the right of watermark window
present in the form of different shapes for

various denominations (₹ 500 – Circle, ₹ 200

– H, ₹ 100 – Triangle) and helps the visually
impaired to identify the denomination.

In the MG 2005 series this feature was

present on the left of the watermark window
in different shapes for various denominations

Page | 27
 (₹ 20 - Vertical Rectangle, ₹ 50-Square, ₹
100 - Triangle, ₹ 500- Circle, ₹ 1000 -
Diamond).

Fluorescence

Number panels of the notes are printed in fluorescent ink. The notes also have optical
fibres. Both can be seen when the notes are exposed to ultra-violet lamp.

Colour Shifting Ink (CSI)

This is a new security feature incorporated in the

₹ 200 and ₹ 500 notes. The numerals of the
denomination on the bottom of the watermark
window on the obverse of ₹ 200 and ₹ 500 notes
respectively are printed in optically variable ink.
The colour of the numeral appears green when
the note is held flat but would change to blue
when the note is held at an angle.

See through Register

The small denominational numeral design printed both on the front

(hollow) and back (filled up) of the note in the vertical band on top of
the Latent image has an accurate back-to-back registration. The entire
denominational numeral can be seen when the note is held against
light.

Omron Anti-copy feature

This feature can be seen in the form of small yellow

circles near the ‘Reserve Bank of India’ (in Hindi) on the
top left of the obverse side and below the
denominational numeral (in Devnagri) on the top right of
the reverse side of the banknote. It prevents
counterfeiting as it gives a different shade when copied
on a photocopy machine. This feature is present on
notes of denominations of ₹ 50 and above.

Page | 28
4.3 Procedure of impounding Counterfeit currency

The counterfeit notes can be impounded by all branches of public sector banks, private sector
banks, private foreign banks, co-operative banks and regional rural banks, all treasuries and
sub-treasuries and all RBI Issue Offices.

Detecting counterfeit banknotes: Banknotes received at bank counters, back offices,

or currency chests in bulk should be examined using machines to verify their
authenticity. If counterfeit notes are detected during a transaction or at the back office /
currency chest, no credit should be given to the customer's account.

The bank branches or treasuries should not return or destroy counterfeit notes. If banks
fail to confiscate counterfeit notes detected on their premises, it will be considered as
intentional involvement in circulating counterfeit notes, and penalties will be imposed for
violation.

Impounding of counterfeit banknotes: Notes determined to be counterfeit should be

stamped as "COUNTERFEIT NOTE". Each confiscated note should be recorded in a
separate register with authentication. The notes shall be impounded in the following
format:

Each banknote, which, on examination of various security features / parameters, is determined as a

counterfeit one, shall be branded with a stamp "COUNTERFEIT BANKNOTE". For this purpose, a stamp
with a uniform size of 5 cm x 5 cm with the following inscription may be used.

COUNTERFEIT BANKNOTE IMPOUNDED

BANK / TREASURY/ SUB-TREASURY

BRANCH / CURRENCY CHEST

SIGNATURE

DATE

Issuing receipts to customers: When a banknote tendered at a bank branch, back

office, currency chest, or treasury is found to be counterfeit, an acknowledgment receipt
should be issued to the customer stamping the note. The receipt, with running serial
numbers, should be authenticated by the cashier and tenderer. A notice informing the
public about this process should be prominently displayed at the offices / branches. The
receipt should be issued even if the tenderer is unwilling to countersign it.

Page | 29
The Acknowledgement Receipt should be issued to the tenderer in the following format:

Name of the Bank / Treasury/ Sub-treasury:

Address:

Serial Number of the Receipt:

Date:

The note (s) described below received from……………………………. (Name and Address of the tenderer)
is/are counterfeit and has/have therefore been impounded and stamped accordingly.

Serial number of the note deemed Parameter on which the note is

Denomination
as counterfeit deemed as counterfeit

Total number of counterfeit notes:

(Signature of the Tenderer)

(Signature of the counter staff)

Reporting counterfeit notes to Police and other authorities: For up to 4 counterfeit

notes detected in a single transaction, a consolidated report should be sent by the
Nodal Bank Officer to the police authorities or Nodal Police Station at the end of the
month, along with the suspect counterfeit notes in the prescribed format:

Consolidated Monthly Reporting for the month of ________

1. Name of the Bank / District:

2. Name and Address of the Nodal Officer:

3. Detail of counterfeit notes:

Denominations / Security
Name of branch / Details of
Date of detection pieces / serial features
currency chest tenderer
numbers breached

4. The counterfeit notes are enclosed.

5. Kindly acknowledge receipt.

(Authorised signatory)
Encl:

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For 5 or more counterfeit notes detected in a single transaction, the counterfeit notes
should be forwarded by the Nodal Bank Officer to the local police authorities or Nodal
Police Station for investigation by filing a FIR in the prescribed format:

Name of the Bank:

District:
Name and Address of the Nodal Bank Officer:
Ref. No. Date:

The Sr. Inspector of Police

___________Police Station,

Dear Sir,

Detection of counterfeit note/s – Request for investigation

We enclose the following counterfeit notes detected in our office on ________. The details of the
counterfeit notes are furnished below.

2. As the printing and/or circulation of forged Indian Currency Notes is an offence under Sections 489A to
489E of the Indian Penal Code, we request you to lodge FIR and conduct the necessary investigation. In
case it is decided to file criminal proceedings in the court of law, you may first arrange to send the notes
to any of the Note Printing Presses, Forensic Science Laboratories etc. in terms of the provisions of
Section 292(1) and 292(3) of the Code of Criminal Procedure) for examination. The expert opinion
furnished may be produced in the court as evidence under Section 292 of the Criminal Procedure Code.
The forged notes may please be returned to us after the completion of the investigation and/or
proceedings in the court of law along with the detailed report of the investigation/decision of the court.

Name and Address of

Denominations Serial Notional Details of the branch / currency Bank’s
/Number of pieces Number Value tenderer chest where detection Entry No
took place

3. The counterfeit notes are enclosed.

4. Please acknowledge receipt.

Yours faithfully,

Authorized Signatory
Encl:

A copy of the monthly consolidated report / FIR should be sent to the Forged Note
Vigilance Cell at the bank's Head Office (for banks) or the Issue Office of the concerned
Reserve Bank (for treasuries).

Page | 31
Acknowledgment of receipt from the police authorities should be obtained for the
forwarded notes, whether sent by insured post or other means. The progress of receipt
acknowledgment should be followed up. Difficulties faced in this regard should be
resolved in consultation with the Nodal Officer of the police authority designated to
coordinate counterfeit banknote investigations.

Banks should monitor and report suspicious trends/patterns in the detection of

counterfeit notes to RBI and police authorities immediately. The progress made in
detecting and reporting counterfeit notes should be regularly discussed in various State
level committees. Data on counterfeit Indian notes detected at bank branches and
treasuries should be included in the monthly returns forwarded to the Reserve Bank
Issue Offices.

In cases involving suspected foreign currency notes, they should be referred to the
Interpol Wing of the CBI, New Delhi, after consultation with the police and government
agencies.

Examining banknotes before issuing, feeding ATMs and remitting to Reserve

Bank of India’s Issue Offices: Banks should ensure that cash receipts in
denominations of ₹100 and above are not put back into circulation without processing
for authenticity in machines. This applies to all bank branches, regardless of the volume
of daily cash receipt. Non-compliance will be considered a violation.

Adequate safeguards and checks should be in place to prevent the dispensation of

counterfeit notes through ATMs. Any instance of dispensing counterfeit notes through
ATMs will be seen as an attempt by the bank to circulate counterfeit notes.

Detection of counterfeits in chest remittances will also be considered as intentional

involvement of the concerned chest branches in circulating counterfeit notes and may
result in special investigations and other actions.

Penalties, equivalent to 100% of the value of counterfeit notes, will be imposed in

addition to recovering the loss caused by such notes, under certain circumstances such
as detection of counterfeit notes in soiled note remittances or during inspections / audits
of currency chest balances by RBI. The responsibility of ensuring the quality and
genuineness of cash loaded at white label ATMs lies with the sponsor bank.

Nodal Bank Officer: Each bank should designate a Nodal Bank Officer district-wise
and notify the concerned Regional Office of RBI and Police authorities. All cases of
reporting counterfeit note detections should go through the Nodal Bank Officer, who will
also serve as the contact point for all activities related to counterfeit note detection.

Page | 32
Forged Notes Vigilance Cell at the Bank's Head Office:

Each bank should establish a Forged Note Vigilance Cell at its Head Office to
disseminate Reserve Bank of India's instructions on counterfeit notes to the bank's
branches, monitor the implementation of these instructions, compile and submit data on
counterfeit note detections to Reserve Bank of India and FIU-IND, follow up on
counterfeit note cases with police authorities / designated nodal officer and sharing
compiled information with the bank's CVO (Chief Vigilance Officer) and reporting all
cases of acceptance/ issue of counterfeit notes.

The Forged Note Vigilance Cell should submit a quarterly status report on the
aforementioned aspects to the Chief General Manager of the Department of Currency
Management at the Reserve Bank's Central Office and the Issue Office of the Regional
office under whose jurisdiction the FNV Cell operates.

The bank should update the Reserve Bank's record of Forged Note Vigilance Cell
addresses by providing the necessary particulars via email every year, as of July 1st.

Format for furnishing address etc. Particulars of Forged Note Vigilance Cell (FNVC) to RBI

Address of FNVC Name and Telephone no Fax no. E-mail

Name of the
(with pin code) designation of (with code). (with code) address of
bank
officer-in-charge the FNVC

We note to intimate immediately the changes, if any, in the particulars furnished above

Name of Authorised Official:

Designation:
Date:

The Forged Note Vigilance Cell should conduct surprise checks at currency chests
where shortages, defective notes, counterfeit notes, etc., are detected. They should
ensure the operation of note sorting machines, monitor counterfeit note detection, and
maintain records. Adequate safeguards, including surprise checks, should be
implemented during note processing and transit.

Provision of infrastructure for detection: To facilitate the detection of counterfeit

notes, all bank branches and identified back offices should be equipped with ultraviolet
lamps or other appropriate banknote sorting / detection machines.

Page | 33
Currency chest branches should be equipped with verification, processing and sorting
machines, which should be used optimally. The machines should conform to the
guidelines on 'Note Authentication and Fitness Sorting Parameters' prescribed by the
Reserve Bank of India.

The banks are required to maintain a daily record of the notes processed through the
Note sorting machines, including the number of counterfeit notes detected. Additionally,
the banks should consider providing at least one counting machine (with a dual display
feature) for public use at the counter.

In terms of reporting data to the RBI, the following guidelines apply:

I. Bank branches:

Counterfeit notes detected by all branches of the bank must be reported on a monthly
basis in the specified format. A statement containing the details of counterfeit notes
detected during the month should be compiled and sent to the relevant Issue Office of
Reserve Bank of India by the 7th of the following month.

Under Rule 3 of the Prevention of Money Laundering Rules, 2005, Principal Officers of
banks are also obligated to report incidents where forged notes have been used as
genuine currency in cash transactions. This information should be reported to the
Director, FIU-IND, Financial Intelligence Unit-India within seven working days.

II. Co-operative banks and regional rural banks:

Data on counterfeit notes detected by branches of Co-operative banks and regional

rural banks should be provided on a monthly basis to the respective Issue Office of
Reserve Bank of India in the prescribed format:

Name of the bank /District:

Statement showing the details of counterfeit banknotes detected in the
_______________ during the month of _______________

A. Details of counterfeit notes detected:

Name of Denomination-wise Details in

branch / pieces Total
Type of detection
currency pieces
10 20 50 100 500 1000
chest

FIR
Non-FIR
Pieces of notes processed

Page | 34
B) Details of cases filed with police:

Pending with Sent to Police

Pending with the
Police at the during the Returned by
Police at the end
beginning of the month under the Police
of the month
month report
No. of cases
No. of pieces

NB: Each FIR lodged comprises one case. The total number of forged notes covered by the FIR may be
indicated in each of the columns above.

Forwarded to: -

1. The General Manager/Deputy General Manager, Reserve Bank of India, Issue

Department, ____________
(Signature)

Name & Designation of the Authorised Official

Regarding the preservation of counterfeit notes received from police authorities:

Counterfeit notes received from police authorities or courts should be carefully stored in
the bank's safe custody, and the respective branch should maintain a record of them.
The Forged Note Vigilance Cell of the bank should also keep a consolidated record of
such counterfeit notes.

Verification of these counterfeit notes at branches should be conducted twice a year (on
March 31st and September 30th) by the Officer-in-charge of the bank office. They
should be preserved for three years from the date of receipt from the police authorities
and then sent to the relevant Reserve Bank Issue Office with complete details.

Counterfeit notes that are part of ongoing court cases should be preserved by the
branch concerned for three years after the conclusion of the case.

In terms of training bank staff in detecting counterfeit notes, it is crucial to ensure that
cash handling staff in banks, treasuries, and sub-treasuries are well-informed about the
security features of banknotes. To educate branch staff on counterfeit note detection,
the design and security features of all banknotes provided to banks and treasuries
should be prominently displayed at the branches for public information.

Controlling offices / training centers should organize training programs on banknote

security features for staff members to enhance counterfeit note detection at the point of
receipt. Banks should ensure that all personnel handling cash are trained in recognizing
the features of genuine Indian banknotes.

Page | 35
4.4 Legal Consequences of Counterfeiting in India

The sections 489 A to 489 E of the Indian Penal Code define the punishment for the
criminal offence of Counterfeiting Currency as follows:

489 A. Counterfeiting currency notes or bank notes:

Whoever counterfeits, or knowingly performs any part of the process of counterfeiting,

any currency-note or bank-note, shall be punished with imprisonment for life, or with
imprisonment of either description for a term which may extend to ten years, and shall
also be liable to fine.

489 B. Using as genuine, forged or counterfeit currency-notes or bank-notes:

Whoever sells to, or buys or receives from, any other person, or otherwise traffics in or
uses as genuine, any forged or counterfeit currency note or bank note, knowing or
having reason to believe the same to be forged or counterfeit, shall be punished with
imprisonment for life, or with imprisonment of either description for a term which may
extend to ten years, and shall also be liable to fine.

489 C. Possession of forged or counterfeit currency-notes or bank-notes:

Whoever has in his possession any forged or counterfeit currency note or bank note,
knowing or having reason to believe the same to be forged or counterfeit and intending
to use the same as genuine or that it may be used as genuine, shall be punished with
imprisonment of either description for a term which may extend to seven years, or with
fine, or with both.

489 D. Making or possessing instruments or materials for forging or counterfeiting

currency notes or bank-notes:

Whoever makes, or performs any part of the process of making, or buys or sells or
disposes of, or has in his possession, any machinery, instrument or material for the
purpose of being used, or knowing or having reason to believe that it is intended to be
used, for forging or counterfeiting any currency note or bank note, shall be punished
with imprisonment for life, or with imprisonment of either description for a term which
may extend to ten years, and shall also be liable to fine.

489 E. Making or using documents resembling currency-notes or bank-notes:

Sub-section (1): Whoever makes, or causes to be made, or uses for any purpose
whatsoever, or delivers to any person, any document purporting to be, or in any way
resembling, or so nearly resembling as to be calculated to deceive, any currency-note
or bank-note shall be punished with fine which may extend to one hundred rupees.

Page | 36
Sub-section (2): If any person, whose name appears on a document the making of
which is an offence under sub-section (1), refuses, without lawful excuse, to disclose to
a police-officer on being so required the name and address of the person by whom it
was printed or otherwise made, he shall be punished with fine which may extend to two
hundred rupees.

Sub-section (3): Where the name of any person appears on any document in respect of
which any person is charged with an offence under sub-section (1) or on any other
document used or distributed in connection with that document it may, until the contrary
is proved, be presumed that that person caused the document to be made.

Page | 37
 5. STEPS TAKEN TO PREVENT THE MENACE OF COUNTERFEITING
i) Strengthening the provisions in the Unlawful Activities (Prevention) Act, 1967 to
combat terror financing by criminalizing the production or smuggling or circulation of
high-quality counterfeit Indian currency as a terrorist act and enlarge the scope of
proceeds of terrorism to include any property intended to be used for terrorism.

ii) A Terror Funding and Fake Currency (TFFC) Cell has been constituted in National
Investigation Agency (NIA) to conduct focused investigation of terror funding and fake
currency cases.

iii) An advisory on terror financing has been issued in April 2018 to states/ union
territories. Guidelines have also been issued in March, 2019 to states/ union territories
for investigation of cases of high-quality counterfeit Indian currency notes.

iv) Training programmes are regularly conducted for the state police personnel on
issues relating to combating terrorist financing.

v) Fake Indian Currency Notes (FICN) network is one of the channels of terror financing
in India. FICN Coordination Group (FCORD) has been formed by the Ministry of Home
Affairs to share intelligence/ information among the security agencies of the states/
centre to counter the problem of circulation of fake currency notes.

vi) Intelligence and security agencies of central and state governments work in tandem
to keep a close watch on the elements involved in terror funding activities and take
action as per law.

vii) Security at the international borders has been strengthened by using new
surveillance technology, deploying additional manpower for round the clock
surveillance, establishing observation posts along the international border, erection of
border fencing and intensive patrolling.

viii) A Memorandum of Understanding (MoU) has been signed between India and
Bangladesh to prevent and counter smuggling and circulation of fake currency notes.

ix) Training programmes are conducted for the police officials of Nepal and Bangladesh
to sensitize them about smuggling/ counterfeiting of Indian currency.

x) The National Investigation Agency has been investigating cases related to high-
quality Fake Indian Currency Notes and some of the major breakthroughs by NIA in
impounding high-quality Fake Indian Currency Notes have been published through
press releases on NIA’s official website which includes cases involving convicts from
Bangladesh, Nepal, Pakistan and UAE along with details of seizures in New Delhi,
Gujarat, Bihar, West Bengal and Maharashtra.

Page | 38
5.1 Indigenisation of raw material procurement and production required for
printing of currency notes

The Reserve Bank of India (RBI) has taken steps to promote the use of indigenous raw
materials in currency production. This includes encouraging domestic production of
security paper, ink, and other necessary components.

i) In line with these efforts, scientists at CSIR-National Physical Laboratory in New Delhi
have developed a novel process for manufacturing a new type of security ink that can
help prevent counterfeiting. This newly developed ink can be easily adopted on a large
scale and can be used on ordinary paper. Security inks play a crucial role in currency
printing as they aid in detecting counterfeit notes. Typically, these inks contain special
features that are only visible under a UV lamp. However, they require a special type of
paper or surface that does not glow under UV light for the marker to be effective.

The ink developed by CSIR eliminates the need for special surfaces. It can be tested
under two types of lights: UV and infrared (IR). The ink is formulated using a cost-
effective dual-mode luminescent composite pigment. This pigment is created by
combining nanorods of rare-earth elements with light-emitting solids in a specific
polymer-based ink. The composite pigment can be excited by two different
wavelengths: UV light (365 nm) and near-infrared (NIR) laser (980 nm).

Under UV light, the composite pigment emits yellow light, while under NIR light, it emits
red light. The ink's unique tunable properties make it highly secure, as patterns that may
appear identical on paper or different currencies can glow differently when exposed to
specific frequencies of light. Additionally, there are plans to replace the NIR laser with
NIR LEDs in the future, making the excitation source more cost-effective.

Overall, the development of this new security ink by CSIR provides a significant
advancement in preventing currency counterfeiting. Its ability to emit specific
wavelengths of light in response to specific excitation wavelengths makes it highly
secure and difficult to replicate.

ii) According to the article published in Keralakaumudi on 6 November 2022, The

Reserve Bank of India (RBI) plans to utilize a chemical powder developed by the
National Institute for Interdisciplinary Science and Technology in Thiruvananthapuram.
Currently, the RBI uses ink with pigments made from fluorescent materials, with the
pigment itself being imported from Switzerland. However, efforts are underway to
develop the pigment domestically, which would help reduce the cost of currency note
production and counteract counterfeit currency production.

Page | 39
The development of these ink ingredients is part of the Atma Nirbhar Bharat mission,
which aims to promote self-reliance in India. The task of developing the ink was
assigned to the Institute in Thiruvananthapuram, while the ink production itself will take
place at the National Security Press in Madhya Pradesh. The currency notes will be
printed at the RBI Press in Mysore.

iii) According to RBI’s press release dated 28 March, 2022, under the ‘Make in India’
initiative, Varnika ink manufacturing unit of Bharatiya Reserve Bank Note Mudran
Private Limited (BRBNMPL) has been set up in Mysuru on March 28, 2022. The unit
has an annual ink manufacturing capacity of 1500 MT and it also manufactures Colour
Shift Intaglio Ink which will help in attaining cost efficiency as well as self-sufficiency in
banknote ink production. This initiative is in the right step towards India’s aim of
achieving self-sufficiency in manufacturing of all critical and key raw materials used in
printing of banknotes and reducing dependency on imports. Establishment of a state-of-
the-art research facility – Learning and Development Centre at Mysuru for testing
robustness of security features and introducing new security features of banknotes has
also been announced by RBI.

Research and development is being carried out on new security features in high tech
areas like nanotechnology, optics, holograms, information technology, inlays and
packaging.

5.2 Conventional techniques for detection of Counterfeit currency

Magnetic Ink Character Recognition (MICR): Some currencies, such as the U.S. dollar,
use magnetic ink in certain parts of the banknotes since 1960s. MICR technology
utilizes magnetic sensors to identify the presence of this ink. However, the level of
magnetism is reduced by wear and tear.

Infrared detection: Infrared (IR) cameras can be used to detect genuine banknotes and
counterfeit notes can be distinguished. For instance, genuine banknotes can be
authenticated by analyzing Euro banknotes which have two different inks, one which
reflects Infrared light while the other that absorbs Infrared light.

Optics and microprinting: Microprinting, which involves printing tiny text that appears
crisp and clear under magnification is difficult to reproduce due to the fine details and
microscopic features present on genuine banknotes. Optical devices with high-
resolution capabilities can reveal these intricate features and differentiate genuine
currency from counterfeits.

Holograms and Color Shifting Ink (CSI): Many modern banknotes incorporate
holographic features and color shifting inks that change color when tilted.

Page | 40
These elements are difficult to replicate accurately and can be easily identified with the
help of specialized equipment or even by simply observing the banknote under different
angles and lighting conditions.

Fluorescence: Counterfeit detection can be enhanced using fluorescence analysis.

Some currencies have fluorescent features, such as specific inks or fibers that glow
under UV light. Authentic notes emit distinct fluorescence patterns, while counterfeit bills
may exhibit different or no fluorescence characteristics.

Digital imaging and analysis: Advanced imaging techniques, such as digital microscopy
and high-resolution scanning, can be employed to examine banknotes for
discrepancies. Analyzing the texture, ink and minute details of the currency can help
identify counterfeit elements.

5.3 Technological innovations in Counterfeit currency detection

Nanotechnology: Nanotechnology involves the use of nanoscale materials and

structures to create unique security features. Specialized nanoparticles can be
embedded in the ink or paper of banknotes, making them extremely difficult to
reproduce accurately. These nanoparticles can exhibit specific optical, magnetic, or
fluorescent properties that can be easily detected using advanced sensors. For
instance, an international research team of National University of Science and
Technology, Moscow, Russia has developed an Iron-Cobalt-Nickel nanocomposite with
tunable magnetic properties to be used for counterfeit money prevention.

Raman Spectroscopy: Raman spectroscopy is a combination of optical and chemical

analysis that uses laser light to analyze the molecular composition of materials. It can
be employed to identify counterfeit banknotes by analyzing the unique Raman spectra
of the ink, paper, and other components of genuine currency. This method can detect
subtle differences between genuine and counterfeit notes, and most importantly is
affordable and takes short time period for analysis.

Near-infrared hyperspectral imaging: Near-infrared (NIR) imaging involves using

specialized cameras or sensors that can capture the NIR light reflected or emitted by
banknotes. Different materials and inks used in counterfeit currency can exhibit distinct
NIR characteristics that can be identified through advanced image analysis algorithms.
This method helps detect counterfeit notes with improved accuracy.

Page | 41
Machine learning and artificial intelligence: Combining machine learning algorithms with
artificial intelligence (AI) allows for automated and intelligent counterfeit detection. High-
resolution cameras or scanners capture detailed images of banknotes, which are then
analyzed using AI algorithms trained on vast datasets of genuine and counterfeit notes.
These algorithms can quickly identify patterns, anomalies, or discrepancies that may
indicate counterfeit currency.

Mobile apps and augmented reality: Mobile applications with augmented reality (AR)
capabilities can be developed to assist individuals in detecting counterfeit currency.
These apps can use the device's camera and AR overlays to highlight the security
features of genuine banknotes, making it easier for users to differentiate between real
and counterfeit money. For instance, students of IIT Kharagpur developed a mobile
application to detect counterfeit currency based on image processing in 2019.

5.4 Touchpoints prone/ vulnerable to coming in contact with Counterfeit currency

Cash registers and point-of-sale (POS) systems: Cashiers and employees handling
cash at retail stores, supermarkets, restaurants, and other businesses are vulnerable to
receiving counterfeit currency during transactions.

ATMs (Automated Teller Machines): ATMs can dispense counterfeit currency if

counterfeit notes have been deposited by previous users. It is crucial for financial
institutions to regularly inspect and maintain their ATMs to minimize the risk of
dispensing counterfeit money.

Banks and financial institutions: Counterfeit currency may find its way into the banking
system through customer deposits, cash withdrawals, or transactions involving cash.
Banks have robust procedures in place to detect and isolate counterfeit notes during
processing.

Currency exchange offices: Exchange offices that handle foreign currencies are
susceptible to counterfeit notes, particularly if they accept cash from various sources
and countries.

Transportation and cash handling companies: The movement of cash through

transportation and cash handling companies involves multiple touchpoints where
counterfeit currency could be introduced, including during sorting, counting, and
packaging processes.

Vending machines and self-service kiosks: Machines that accept cash payments, such
as vending machines, ticketing machines, and self-service kiosks, can inadvertently
accept counterfeit currency if proper detection mechanisms are not in place.

Page | 42
Businesses that deal with large amounts of cash are at higher risk of encountering
counterfeit currency due to the nature of their operations. Hence, it is important to install
requisite counterfeit currency detection measures for the businesses in order to ensure
genuineness of accepted currency.

Person-to-person transactions: Transactions between individuals or in informal settings

such as informal marketplaces, transactions between street vendors or public
transportation operators can involve the risk of encountering counterfeit currency.

According to an India Today article published on February 13, 2013, the major routes of
entry of Fake Indian Currency Notes into India from other countries are through the
states of Jammu and Kashmir, Punjab, Uttar Pradesh, Bihar and West Bengal from
Pakistan, Nepal, Bangladesh and Dubai as illustrated in Figure 3. Nepal and India share
a 1770 km long open border which makes it vulnerable towards smuggling of Fake
Indian Currency Notes.

Figure 3: Routes of Fake Indian Currency Notes entering into India from other countries

(Source: India Today)

According to crime in India publications of National Crime Records Bureau, foreigners
belonging to Bangladesh, Nepal, Nigeria, Africa, Iraq, Myanmar and South Africa have
been convicted in India in cases of Fake Indian Currency Notes.

Page | 43
 6. DATA ANALYSIS AND INTERPRETATION
6.1 Trend of FICN cases reported

Top 20 states according to total cases of FICN reported 2017-21

(Top 20 States)

572
540

448

332
No of cases

309 292
278
215 203
156 139
134 127 116
113 112 98
86 81
42

ir
h
h
sh

h
ra
l

d
du

a
n

T
m

a
ab

a
la
ga

at

ar

m
es
es

ar
an

an
iU
ha

ak

an
sh
ht
sa

ra
de

ar

sh
Ch Bih
Na

nj
en

sg
ad
ad

kh

ng
at
st
as

di

ry
Ke
lh
uj

Pu
As
ra

Ka
tB

tti

O
rn
ja

Pr
Pr
An De

Ha
il

ra

la
ar
rP

m
Ra

ha
Ka

Te
ta
ah

&
es

Ta

a
ra
ta

hy
Ut

u
W

dh

m
Ut

ad

m
M

Ja
(Source: Crime in India, National Crime Records Bureau)

 The total number of cases of Fake Indian Currency Notes reported during the time
period of 2017-21 were the highest in Uttar Pradesh (572) followed by West Bengal
(540) and Assam (448).

Year wise cases of FICN reported in states 2017-21 (Top 10 States)

2017 2018 2019 2020 2021

228

208
No of cases

172

141 134

109
99
92
82 77 78 75 80 76 75 82
7170
68 66 65
53 62 54 68 62 57 54
53 55 48
52
46
49 41 40 34
42 35 28 36
27 32 26 30
20 22
h
h

s
l

a
a

u
s

a
n

e
tr

T
g

d
e

t
a

k
d
h

U
ra
n

a
d

ta
th

ra
a

s
e

N
ra

ja

i
ra

a
s
B

P
s

lh
P

u
il
s

rn
ja
a

e
m
A

ra
t

G
a
h
s

a
r

a
a

R
e

K
T
W

tt

d
U

n
A

(Source: Crime in India, National Crime Records Bureau)

 Highest number of cases of Fake Indian Currency Notes reported in a state in a

particular year was in Uttar Pradesh with 228 cases reported in the year 2018, followed
by 208 cases reported in West Bengal in the same year and 134 reported in Assam in
the year 2017.

Page | 44
 Total cases of FICN reported in districts under RBI Kanpur's jurisdiction
2017-21

2017-21 553

2021 30

2020 28

2019 49

2018 266

2017 180

No of cases

(Source: Crime in India, National Crime Records Bureau)

 During the time period of 2017-21 a total of 553 cases of FICN were reported with
highest number of cases: 266 reported in the year 2018, followed by 180 reported in the
year 2017, after which the number of cases reported have declined significantly to 49 in
the year 2019, 30 in the year 2021 and the lowest of 28 in the year 2020 in Districts
under RBI Kanpur’s jurisdiction.

Total cases of FICN reported during 2017-21 in districts under RBI Kanpur's
jurisdiction
82 (Top 10 Districts)

55
No of cases

41
37 36
31 31 29
26

13

Kanpur Nagar Meerut Prayagraj Agra Muzaffarnagar Ghaziabad Dehradun Haridwar Udhamsingh Etah
Nagar

(Source: Crime in India, National Crime Records Bureau)

 The highest number of cases of FICN reported in districts under RBI Kanpur’s
jurisdiction during the time period 2017-21 was in Kanpur Nagar (82) followed by Meerut
(55) and Prayagraj (41).

Page | 45
 Year wise trend of cases of FICN reported in districts under RBI Kanpur's
jurisdiction
(In descending order of cases reported in the districts)

82 2017 2018 2019 2020 2021 2017-21

55

42 41 37 36
No of cases

35 31 31
31 29 26
30 21 22
16 13 16 13
11 9 13 8 21
7 7 5 11 11
5

ar
r
ar

ad
j

ar
t

ga

h
a

ag
ru

du
ag

gr

gr

ta
w
ab
na
ee

N
id
ra

E
ya

A
N

zi
ar

h
ar
M

eh
r

ra

ha

ng
pu

ff

H
D
P

si
an

uz

am
K

dh
U
(Source: Crime in India, National Crime Records Bureau)

 The trend line above shows significant decrease in number of cases of FICN reported
during the year 2019-21 with very less number of cases reported specifically during
2020 and 2021.

Year wise cases of FICN reported in districts under jurisdiction of RBI

Kanpur 2017-21

2017 2018 2019 2020 2021 2017-21

37 41 13 31 82 55 36 31 29 26
No of cases

7 1 2
4 3 2
7 16 5
11
4 42 16 8
22 4 11 31 21
13 35
21 13
9 30 11
2 5 3 3
ar
r
ar

ga
d

ag
n
aj

ar
t
ba
a

ag

du
ru
gr

w
na
ta
gr

N
ee
N
ia

id
ya

ra
A

ar

h
z

ar
M

eh
r

ng
ra

ha

pu

H
af

D
P

si
G

an

uz

am
K

dh
U

(Source: Crime in India, National Crime Records Bureau)

 The year wise decomposition of the bar graph comprising of cases of FICN reported
indicates majority of the cases were reported during the year 2018 (48.29 %) followed
by 2017 (34.65 %) while reporting of cases are relatively lower in 2019 (8.92 %), 2020
(4.46 %) and 2021 (3.67 %).

Page | 46
 2017 Top 10 districts according to cases of FICN reported 2018 Top 10 districts according to cases of FICN reported
42
35

30
31

21 22 21
16 16
13 13
11 11
9 8 7
6 5 5 4

ah
a

al
ut
r

r
un

ad
Ag

wa

t
Et
er
ar

ini
ar

ad

iab
ra

ar

Me
ag

rid

Na
ag
t

ra
e ru

ar
raj

ag

hr
ad
Ag

hr

az
rN

Ha
t

rn
r

du

thu

ha
w
ga

De
hN
ag

ha
Me

ffa

Gh
rid

pu
hra

zia

De
Na

Ma
ay

za
ds

ing
n
Ha

Ka
a
De

Mu
Pr

ur

lan
ur

ms
Gh

np
np

ha
Bu
Ka
Ka

Ud
2019 Top 10 districts according to cases of FICN reported 2020 Districts with highest cases of FICN reported
11
7

5 3
4 4
3 2 2 2 2 2
2 2 2 2 1 1 1 1 1 1 1 1

rh
t

tal
ya

ra
pu

r
eru

n
raj
ad

wa
t
hr

ga

du
r

wa
thu

ini
rai

Ha

ga
ag
iab

ha

ar
Me

rid
ra

Ali

hra

Na
pa
i

Au

Na

Ma
ns
ura

Ka ar
ag
ml

ay
ar
raj

ds
n

Ha
ad

az
Ag

am
hr

ag

De
ar

du

hN
Pr

lan
w

ur
a

Gh
ag

hN
th
b

Ch
Jh

Sh

np
ag

rid

hra

Bu

ing
zia

sh
Ma
ay

dd
rN

Ha

ms
nd
a

Bu
De
Pr

ha
Gh
pu

la

m
Ud
Bu

uta
n
Ka

Ga

2021 Top 10 districts according to cases of FICN reported

2 2 2 2 2 2 2 2
No of cases

Bulandshahr Gautam Agra Prayagraj Banda Ghaziabad Kanpur Meerut Hapur Haridwar
Buddh Nagar
Nagar

(Source: Crime in India, National Crime Records Bureau)

 In 2017, the highest number of FICN Cases were reported in Meerut (35) followed by
Kanpur Nagar (30) and Prayagraj (21). In 2018, the highest number of FICN cases were
reported in Kanpur Nagar (42) followed by Muzaffarnagar (31) and Agra (22). In 2019,
the reporting of FICN cases was highest in Prayagraj (11) followed by Kanpur Nagar (7)
and Haridwar (5). In 2020, the number of FICN cases reported was highest in
Ghaziabad (7) while in 2021 the number of FICN cases reported was highest in
Bulandshahr (4).

Page | 47
 Year wise trend of cases of FICN reported in districts of Uttar Pradesh

82

55
42 41 37
30 35 36 31
22 31 28
21
No of cases

16 11 13 12 13 13 12
9 7 11 10 10
7 6
t

ra

ah

ra
j

ur
d
ar

ar
r

ar
ru

ra

e
ga

ba
Ag

hu
at

np
Et
ag

ah
ee

ag
ag

na

ar
a

at
ra

sh
N

N
ay

zi

on
r

M
ha
fa

ha
ur

nd

dh
Pr

af

si
np

Sa
G

la

bu
is
uz
Ka

Bu
m

m
M

om

ta
au
C

G
w
no
ck
Lu

2017 2018 2019

2020 2021 2017-2021
(Source: Crime in India, National Crime Records Bureau)

 For districts of Uttar Pradesh, the highest number of cases of FICN were reported in
Kanpur Nagar (82) followed by Meerut (55) and Prayagraj (41) during 2017-2021.

Districts of Uttarakhand with highest FICN reporting

31
29
26
No of cases

16 13
21
11
11
8 7
7

Dehradun Haridwar Udhamsingh Nainital Pauri Garhwal

Nagar

2017 2018 2019

2020 2021 2017-2021

(Source: Crime in India, National Crime Records Bureau)

 For Districts of Uttarakhand, the highest number of cases of FICN were reported in
Dehradun (31) followed by Haridwar (29) and Udhamsingh Nagar (26) during 2017-21.

Page | 48
 6.2 Trend of FICN seized

Top 10 States according to volume of FICN seized

Punjab 38 k

Kerala 44 k

Karnataka 69 k

West Bengal 92 k

Uttar Pradesh 98 k

Tamil Nadu 1 lakh

Andhra Pradesh 1.2 lakh

Gujarat 1.9 lakh

Delhi 2.8 lakh 7.8 lakh

Maharashtra

Volume of notes seized

(Source: Crime in India, National Crime Records Bureau)

 The highest volume of FICN was seized in Maharashtra (7.89 lakh notes) followed by
Delhi (2.89 lakh notes) and Gujarat (1.92 lakh notes) during 2017-21.

High-quality FICN seized by Thane City Police in 2021: The counterfeiting network operated in
Naupada, Thane, Maharashtra. The seizure consisted of FICN in denominations of ₹ 2000.
(Source: National Investigation Agency)

Top 10 States according to value of FICN seized

Punjab 2.4 crores

Kerala 4.7 crores

Uttar Pradesh 5.8 crores

Karnataka 8.1 crores

Andhra Pradesh 8.9 crores

West Bengal 10.8 crores

Tamil Nadu 11.3 crores

Delhi 15.5 crores

Gujarat 15.9 crores

Maharashtra 88 crores

Amount seized (in ₹)

(Source: Crime in India, National Crime Records Bureau)

Page | 49
  The highest value of FICN was seized in Maharashtra (88.84 crores) followed by
Gujarat (15.91 crores) and Delhi (15.52 crores) during 2017-21.

Table 3: Volume and value of Fake Indian Currency Notes seized

Total FICN Seized

Year Notes Value
2017 355994 281019294
2018 257243 179536992
2019 287404 253909130
2020 834947 921780480
2021 310080 203929260
(Source: National Crime Records Bureau)

 The value of FICN seized was highest in 2020 (₹ 92.17 crores) followed by 2017
(28.10 crores), 2019 (25.39 crores), 2021 (20.39 crores) and the least in 2018 (17.95
crores). The volume of FICN Seized was highest in 2020 (8.34 lakh notes) followed by
2017 (3.55 lakh notes), 2021 (3.10 lakh notes), 2019 (2.87 lakh notes) and the least in
2018 (2.57 lakh notes).

Table 4: Denomination wise volume and value of Fake Indian Currency Notes seized

(Including discontinued notes)

(Discontinued)
₹ 2000 ₹ 500 ₹ 200
₹ 1000
Year
Note
Notes Value Notes Value Notes Value Value
s
201 14979600
74898 65731 65731000 111694 55847000 835 167000
7 0
201 10955200 1324 264880
54776 27472 27472000 61505 30752500
8 0 4 0
201 18113200 1748 349720
90566 28541 28541000 65993 32996500
9 0 6 0
202 24483 48966800 31814 31814300 1184 236820
215474 107737000
0 4 0 3 0 1 0
202 12183000 2279 455820
60915 2990 2990000 132060 66030000
1 0 1 0

₹ 100 ₹ 50 ₹ 20 ₹ 10 Others (₹ 5, ₹ 2 & ₹ 1)

Year
Notes Value Notes Value Notes Value Notes Value Notes Value
201
92778 9277800 3502 175100 933 18660 103 1030 5520 5704
7
201
85732 8573200 9771 488550 974 19480 2725 27250 1044 3212
8

Page | 50
 201
71817 7181700 10728 536400 160 3200 2113 21130 0 0
9
202
33443 3344300 10188 509400 34 680 990 9900 0 0
0
202
79634 7963400 10894 544700 501 10020 293 2930 2 10
1
(Source: National Crime Records Bureau)

 Total amount of Fake Indian Currency seized during the period 2017 to 2021 is of the
face value of ₹ 184.01 crores (20.45 lakh notes).

Table 5: Denomination wise total volume and value of FICN seized during 2017-21

(Including
(Discontinued)
₹ 2000 discontinued notes) ₹ 200
₹ 1000
₹ 500
Notes Value Notes Value Notes Value Notes Value
525989 1051978000 442877 442877000 586726 293363000 66197 13239400

Others (₹ 5, ₹ 2 & ₹
₹ 100 ₹ 50 ₹ 20 ₹ 10
1)

Note
Notes Value Notes Value Notes Value Value Notes
s
363404 36340400 45083 2254150 2602 52040 6224 62240 6566
(Source: National Crime Records Bureau)

 Fake Indian Currency notes of denomination ₹ 500 has been the most counterfeited
currency note in terms of volume (5.86 lakh notes). Currency notes of denomination ₹
2000 has been the second most counterfeited note in terms of volume (5.25 lakh notes)
while currency notes of denomination ₹ 1000 were the third most counterfeited notes in
terms of volume (4.42 lakh notes). In terms of value of Fake Indian Currency notes
seized, currency notes of denomination ₹ 2000 were the most counterfeited ( ₹ 105.19
crores) while currency notes of denomination ₹ 1000 were the second most
counterfeited note in terms of value (₹ 44.28 crores) followed by ₹ 500 notes ( ₹ 29.33
crores).

FICN worth Rs 316.98 crore was seized by Mumbai Police and Rural Police of Surat, Gujarat in
2022: The counterfeiting network operated collectively in Mumbai, Delhi, Indore and Bangalore
apart from Kamrej, Jamnagar, Anand, Surat in Gujarat under the shadow of being a Logistics
company. The seizure by Mumbai Police consisted of FICN worth ₹ 160 crores in denominations
of 500 and 2000 along with demonetized currency worth ₹ 67 crores while FICN worth ₹ 90
crores was seized in Gujarat. Page | 51
(Source: India Today article dated October 5, 2022)
 Volume of FICN seized of Denomination ₹ 10

2725

2113

990

103 293

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 10 was seized in 2018 ( ₹ 27.25

thousands) followed by 2019 (₹ 21.13 thousands), 2020 (₹ 9.90 thousands) and 2021
(₹ 2.93 thousands) while it was the least in 2017 (₹ 1.03 thousands).

Volume of FICN seized of Denomination ₹ 20

974
933

501

160

34

2017 2018 2019 2020 2021

Page | 52
 (Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 20 was seized in 2018 ( ₹ 19.48

thousands) followed by 2017 (₹ 18.66 thousands), 2021 (₹ 10.02 thousands) and 2019
(₹ 3.20 thousands) while it was the least in 2020 (₹ 680).

Volume of FICN seized of Denomination ₹ 50

10728 10894
10188
9771

3502

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 50 was seized in 2021 ( ₹ 5.44 lakhs)
followed by 2019 (₹ 5.36 lakhs), 2020 (₹ 5.09 lakhs) and 2018 ( ₹ 4.88 lakhs) while it
was the least in 2017 (₹ 1.75 lakhs).

Volume of FICN seized of Denomination ₹ 100

92778
85732
79634
71817

33443

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

Page | 53
 The highest amount of FICN of denomination ₹ 100 was seized in 2017 ( ₹ 92.77
lakhs) followed by 2018 (₹ 85.73 lakhs), 2021 (₹ 79.63 lakhs) and 2019 ( ₹ 71.81 lakhs)
while it was the least in 2020 (₹ 33.44 lakhs).

Volume of FICN seized of Denomination ₹ 200

22791

17486

13244
11841

835

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 200 was seized in 2021 ( ₹ 45.58
lakhs) followed by 2019 (₹ 34.97 lakhs), 2018 (₹ 26.48 lakhs) and 2020 ( ₹ 23.68 lakhs)
while it was the least in 2017 (₹ 1.67 lakhs).

Volume of FICN seized of Denomination ₹ 500

215474

132060
111694

65993
61505

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

Page | 54
 The highest amount of FICN of denomination ₹ 500 was seized in 2020 ( ₹ 10.77
crores) followed by 2021 (₹ 6.60 crores), 2017 (₹ 5.58 crores) and 2019 ( ₹ 3.29 crores)
while it was the least in 2018 (₹ 3.07 crores).

Page | 55
 Volume of FICN seized of Denomination ₹ 1000

318143

65731
28541 2990
27472

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 1000 was seized in 2020 ( ₹ 31.81
crores) followed by 2017 (₹ 6.57 crores), 2019 (₹ 2.85 crores) and 2018 ( ₹ 2.74 crores)
while it was the least in 2021 (₹ 29.90 lakhs).

Volume of FICN seized of Denomination ₹ 2000

244834

90566
74898
54776 60915

2017 2018 2019 2020 2021

(Source: National Crime Records Bureau)

 The highest amount of FICN of denomination ₹ 2000 was seized in 2020 ( ₹ 48.96
crores) followed by 2019 (₹ 18.11 crores), 2017 (₹ 14.97 crores) and 2021 ( ₹ 12.18
crores) while it was the least in 2018 (₹ 10.95 crores).

Page | 56
 Volume of FICN Denomination-wise
9.7 k 10.7 k 33.4 k 10.8 k

92.7 k 71.8 k 79.6 k

85.7 k 2.1 lakhs

17.4 k 22.7 k
13.2 k
1.1 lakhs 65.9 k
3.1 lakhs
61.5 k 1.3 lakhs
28.5 k
65.7 k
27.4 k
90.5 k 2.4 lakhs
74.8 k 54.7 k 60.9 k

2017 2018 2019 2020 2021

2000 1000 500

200 100 50
20 10 Others (Including Coins)
(Source: National Crime Records Bureau)

 In terms of volume of FICN seized in 2017, the most counterfeited note was of the
denomination of ₹ 500 (1.11 lakh notes) followed by denomination of ₹ 100 (92.77
thousand notes), denomination of ₹ 2000 (74.89 thousand notes) and denomination of
₹ 1000 (65.73 thousand notes).

 In terms of volume of FICN seized in 2018, the most counterfeited note was of the
denomination of ₹ 100 (85.73 thousand notes) followed by denomination of ₹ 500
(61.50 thousand notes), denomination of ₹ 2000 (54.77 thousand notes), denomination
of ₹ 1000 (27.47 thousand notes), denomination of ₹ 200 (13.24 thousand notes) and
denomination of ₹ 50 (9.77 thousand notes).

 In terms of volume of FICN seized in 2019, the most counterfeited note was of the
denomination of ₹ 2000 (90.56 thousand notes) followed by denomination of ₹ 100
(71.81 thousand notes), denomination of ₹ 500 (65.99 thousand notes), denomination
of ₹ 1000 (28.54 thousand notes), denomination of ₹ 200 (17.48 thousand notes) and
denomination of ₹ 50 (10.72 thousand notes).

Page | 57
 In terms of volume of FICN seized in 2020, the most counterfeited note was of the
denomination of ₹ 1000 (3.18 lakh notes) followed by denomination of ₹ 2000 (2.44
lakh notes), denomination of ₹ 500 (2.15 lakh notes) and denomination of ₹ 100 (33.44
thousand notes).

 In terms of volume of FICN seized in 2021, the most counterfeited note was of the
denomination of ₹ 500 (1.32 lakh notes) followed by denomination of ₹ 100 (79.63
thousand notes), denomination of ₹ 2000 (60.91 thousand notes), denomination of ₹
200 (22.79 thousand notes) and denomination of ₹ 50 (10.89 thousand notes).

Value of FICN Denomination-wise

33.4 lakhs
92.7 lakhs 85.7 lakhs 71.8 lakhs 79.6 lakhs
10.7 crores
5.5 crores 3.2 crores
3 crores
2.8 crores 6.6 crores
2.7 crores 31.8 crores
6.5 crores
29.9 lakhs

18.11 crores
10.9 crores 12.18 crores
14.9 crores 48.96 crores

2017 2018 2019 2020 2021

2000 1000 500

200 100 50
20 10 Others (Including Coins)
(Source: National Crime Records Bureau)

 In terms of value of FICN seized in 2017, the highest value was of the denomination of
₹ 2000 (₹ 14.97 crores) followed by denomination of ₹ 1000 (₹ 6.57 crores),
denomination of ₹ 500 (₹ 5.58 crores) and denomination of ₹ 100 (₹ 92.77 lakhs).

 In terms of value of FICN seized in 2018, the highest value was of the denomination of
₹ 2000 (₹ 10.95 crores) followed by denomination of ₹ 500 (₹ 3.07 crores),
denomination of ₹ 1000 (₹ 2.74 crores) and denomination of ₹ 100 (₹ 85.73 lakhs).

Page | 58
 In terms of value of FICN seized in 2019, the highest value was of the denomination of
₹ 2000 (₹ 18.11 crores) followed by denomination of ₹ 500 (₹ 3.29 crores),
denomination of ₹ 1000 (₹ 2.85 crores) and denomination of ₹ 100 (₹ 71.81 lakhs).

 In terms of value of FICN seized in 2020, the highest value was of the denomination of
₹ 2000 (₹ 48.96 crores) followed by denomination of ₹ 1000 (₹ 31.81 crores) and
denomination of ₹ 500 (₹ 10.77 crores).

 In terms of value of FICN seized in 2021, the highest value was of the denomination of
₹ 2000 (₹ 12.18 crores) followed by denomination of ₹ 500 (₹ 6.60 crores) and
denomination of ₹ 500 (₹ 79.63 lakhs).

Denomination wise FICN seized in different states of India in 2017

(Source: National Crime Records Bureau)

 In 2017, highest value of FICN was seized in Gujarat ( ₹ 9 crores) followed by Delhi ( ₹
6.78 crores) and Uttar Pradesh (₹ 2.86 crores).

Page | 59
 Denomination wise FICN seized in different states of India in 2018

(Source: National Crime Records Bureau)

 In 2018, highest value of FICN was seized in Delhi (₹ 3.63 crores) followed by Tamil
Nadu (₹ 2.84 crores) and West Bengal (₹ 2.10 crores).

Denomination wise FICN seized in different states of India in 2019

(Source: National Crime Records Bureau)

 In 2019, highest value of FICN was seized in Karnataka ( ₹ 4.78 crores) followed by
Gujarat (₹ 3.77 crores) and Andhra Pradesh (₹ 3.70 crores).

FICN seized by Directorate of Revenue Intelligence, Surat in 2019: The counterfeit notes were
brought by the accused from Bihar to Surat by train.
(Source: National Investigation Agency)

Page | 60
Denomination wise FICN seized in different states of India in 2020

(Source: National Crime Records Bureau)

 In 2020, highest value of FICN was seized in Maharashtra (₹ 83.61 crores) followed
by West Bengal (₹ 2.46 crores) and Andhra Pradesh (₹ 1.44 crores).

Denomination wise FICN seized in different states of India in 2021

(Source: National Crime Records Bureau)

 In 2021, highest value of FICN was seized in Tamil Nadu ( ₹ 6.13 crores) followed by
Delhi (₹ 2.05 crores) and Kerala (₹ 1.95 crores).

Page | 61
 Trend of FICN seized in Uttar Pradesh
2.8 crores

1.3 crores
Amount (in ₹)

77.6 lakhs

38.7 lakhs 44.7 lakhs

2017 2018 2019 2020 2021

Year

(Source: National Crime Records Bureau)

 The value of FICN seized from Uttar Pradesh has decreased constantly from 2017 to
2020 with seizures of ₹ 2.86 crores in 2017, ₹ 1.33 crores in 2018, ₹ 77.67 lakhs in
2019 and ₹ 38.79 lakhs in 2020 while there was a slight increase in the seizure amount
of ₹ 44.71 lakhs in 2021 compared to 2020.

Trend of FICN seized in Uttarakhand

5.3 lakhs

3.7 lakhs
Amount (in ₹)

1.4 lakhs

10.2 k 0

2017 2018 2019 2020 2021

Year

(Source: National Crime Records Bureau)

 The value of FICN seized from Uttarakhand has decreased constantly from 2017 to
2020 with seizures of ₹ 5.36 lakhs in 2017, ₹ 1.41 lakhs in 2018 and ₹ 10.20 thousands
in 2019 while there were no seizures during 2020 as per reports. In 2021, FICN worth ₹
3.76 lakhs were seized.

Page | 62
 Value of FICN seized by All India Customs

128.05

Value of FICN (in lakhs) 99.15

76.59

62.4

44

2.01 6.7

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

(Source: Directorate of Revenue Intelligence Annual Report)

 The highest value of FICN was seized by All India Customs during 2015-16 ( ₹ 128.05
lakhs) followed by 2018-19 (₹ 99.15 lakhs), 2017-18 (₹ 76.59 lakhs), 2019-20 ( ₹ 62.40
lakhs), 2021-22 (₹ 44.00 lakhs), 2020-21 (₹ 6.70 lakhs) and it was the least during
2016-17 (₹ 2.01 lakhs).

Cases of high-quality Fake Indian Currency Notes involving foreigners:

High-quality FICN worth ₹ 4.08 lakhs was seized by Thane City Police in 2015: The
counterfeiting network operated in Thane, Maharashtra. The seizure consisted of 408 pieces
of FICN in denomination of ₹ 1000. The accused belong to Bangladesh.

High-quality FICN worth ₹ 25 lakhs was seized in Bihar in 2015:

The counterfeit notes were couriered from United Arab Emirates through International courier
service to Nepal and subsequently smuggled into India.

(Source: National Investigation Agency)

Page | 63
6.3 Trend of FICN detected in the banking system

Table 6: Volume and value of Fake Indian Currency Notes detected in the banking
system

Total FICN detected in the banking system

Year Notes Value
2010-11 435607 190110410
2011-12 521155 247087230
2012-13 498252 250409580
2013-14 488273 248402660
2014-15 594446 286694200
2015-16 632926 296417110
2016-17 762072 434675310
2017-18 522783 233491960
2018-19 317384 82359960
2019-20 296695 74803540
2020-21 208625 54500080
2021-22 230971 82593560
2022-23 225769 79871120
(Source: RBI Annual Report)
Note: The value of Fake India Currency Notes has been calculated only for the
denominations of 2000, 1000, 500, 200, 100, 50, 20 & 10.

 The value of FICN detected in the banking system was highest during 2016-17 (₹
43.46 crores) followed by 2015-16 (₹ 29.64 crores), 2014-15 (₹ 28.66 crores), 2012-13
(₹ 25.04 crores), 2013-14 (₹ 24.84 crores), 2011-12 (₹ 24.70 crores), 2017-18 ( ₹ 23.34
crores), 2010-11 (₹ 19.01 crores), 2021-22 (₹ 8.25 crores), 2018-19 (₹ 8.23 crores),
2022-23 (₹ 7.98 crores), 2019-20 (₹ 7.48 crores) and the least in 2020-21 ( ₹ 5.45
crores).

 The volume of FICN detected in the banking system was highest in 2016-17 (7.62 lakh
notes) followed by 2015-16 (6.32 lakh notes), 2014-15 (5.94 lakh notes), 2017-18 (5.22
lakh notes), 2011-12 (5.21 lakh notes), 2012-13 (4.98 lakh notes), 2013-14 (4.88 lakh
notes), 2010-11 (4.35 lakh notes), 2018-19 (3.17 lakh notes), 2019-20 (2.96 lakh notes),
2021-22 (2.30 lakh notes), 2022-23 (2.25 lakh notes) and the least in 2020-21 (2.08
lakh notes).

Page | 64
 Table 7: Denomination wise volume and value of Fake Indian Currency Notes detected
in the banking system

(Including discontinued notes)

(Discontinued)
₹ 2000 ₹ 500 ₹ 200
Year ₹ 1000

Notes Value Notes Value Notes Value Notes Value

2010-11 - - 54112 54112000 246049 123024500 - -
2011-12 - - 83280 83280000 301678 150839000 - -
2012-13 - - 98459 98459000 281265 140632500 - -
2013-14 - - 110035 110035000 252269 126134500 - -
2014-15 - - 131190 131190000 273923 136961500 - -
2015-16 - - 143099 143099000 261695 130847500 - -
2016-17 638 1276000 256324 256324000 317766 158883000 - -
1792 35858000 103611 103611000 137810 68905000 79 15800
2017-18
9
2184 43694000 717 717000 22836 11418000 12728 2545600
2018-19
7
1702 34040000 72 72000 30065 15032500 31969 6393800
2019-20
0
2020-21 8798 17596000 2 2000 39462 19731000 24245 4849000
1360 27208000 11 11000 79683 39841500 27074 5414800
2021-22
4
2022-23 9806 19612000 482 482000 91116 45558000 27258 5451600

₹ 100 ₹ 50 ₹ 20 ₹ 10 Others (₹ 5, ₹ 2 & ₹ 1)

Year
Notes Value Notes Value Notes Value Notes Value Notes
2010-11 124219 12421900 10962 548100 126 2520 139 1390 0
2011-12 123398 12339800 12457 622850 216 4320 126 1260 0
2012-13 108225 10822500 9759 487950 221 4420 321 3210 2
2013-14 118873 11887300 6851 342550 87 1740 157 1570 1
2014-15 181799 18179900 7160 358000 106 2120 268 2680 0
2015-16 221447 22144700 6453 322650 96 1920 134 1340 2
2016-17 177195 17719500 9222 461100 324 6480 523 5230 80
2017-18 239182 23918200 23447 1172350 437 8740 287 2870 1
2018-19 221218 22121800 36875 1843750 818 16360 345 3450 0

Page | 65
2019-20 168739 16873900 47454 2372700 510 10200 844 8440 22
2020-21 110736 11073600 24802 1240100 267 5340 304 3040 9
2021-22 92237 9223700 17696 884800 311 6220 354 3540 1
2022-23 78699 7869900 17755 887750 337 6740 313 3130 3
(Source: RBI Annual Report)

Total amount of Fake Indian Currency detected in the banking system during the period
ranging from April 2010 to March 2023 is of the face value of ₹ 256.14 crores (57.34
lakh notes).

Table 8: Denomination wise total volume and value of FICN detected in the banking
system (For the period ranging from April 2010 to March 2023)

(Including
(Discontinued)
₹ 2000 discontinued notes) ₹ 200
₹ 1000
₹ 500
Notes Value Notes Value Notes Value Notes Value
89642 179284000 981394 981394000 2335617 1167808500 123353 24670600

Others (₹ 5, ₹ 2 & ₹
₹ 100 ₹ 50 ₹ 20 ₹ 10
1)

Notes Value Notes Value Notes Value Notes Value Notes

1965967 196596700 230893 11544650 3856 77120 4115 41150 121
(Source: RBI Annual Report)

 Fake Indian Currency notes of denomination ₹ 500 has been the most counterfeited
currency note both in terms of volume (23.35 lakh notes) and value ( ₹ 116.75 crores).
Currency notes of denomination ₹ 100 has been the second most counterfeited note in
terms of volume (19.65 lakh notes) while currency notes of denomination ₹ 1000 were
the third most counterfeited notes in terms of volume (9.81 lakh notes). In terms of value
of Fake Indian Currency notes detected in the banking system, currency notes of
denomination ₹ 1000 were the second highest (₹ 98.13 crores) followed by ₹ 100 notes
(₹ 19.65 crores). In spite of being a lower denomination currency note, ₹ 50 was the
fourth highest counterfeited currency note in terms of volume (2.30 lakh notes).

Page | 66
 Volume of FICN of denomination ₹ 10 detected in the banking system
844

523

345 354
321 304 313
287
268

157 134
139 126

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 10 detected in the banking system

was in 2019-20 (₹ 8.44 thousands) followed by 2016-17 ( ₹ 5.23 thousands) and 2021-
22 (₹ 3.54 thousands) while it was the least in 2011-12 (₹ 1.26 thousands).

Volume of FICN of denomination ₹ 20 detected in the banking system

818

510
437

324 337
311
267
216 221

126 106
87 96

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 20 detected in the banking system

was in 2018-19 (₹ 16.36 thousands) followed by 2019-20 (₹ 10.20 thousands) and
2017-18 (₹ 8.74 thousands) while it was the least in 2013-14 (₹ 1.74 thousands).

Page | 67
 Volume of FICN of denomination ₹ 50 detected in the banking system
47454

36875

24802
23447

17696 17755

12457 9222
10962
9759
6851 7160 6453

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 50 detected in the banking system

was in 2019-20 (₹ 23.72 lakhs) followed by 2018-19 (₹ 18.43 lakhs) and 2020-21 ( ₹
12.40 lakhs) while it was the least in 2015-16 (₹ 3.22 lakhs).

Volume of FICN of denomination ₹ 100 detected in the banking system

239182
221447 221218
177195
181799 168739

123398 118873
124219 110736
108225
92237
78699

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 100 detected in the banking system
was in 2017-18 (₹ 2.39 crores) followed by 2015-16 ( ₹ 2.21 crores) and 2018-19 ( ₹2.21
crores) while it was the least in 2022-23 (₹ 78.69 lakhs).

Page | 68
 Volume of FICN of denomination ₹ 200 detected in the banking system

31969

27074 27258
24245

12728

79

2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 200 detected in the banking system
was in 2019-20 (₹ 63.93 lakhs) followed by 2022-23 (₹ 54.51 lakhs) and 2021-22 ( ₹
54.14 lakhs) while it was the least in 2018-19 (₹ 25.45 lakhs) excluding the detection of
2017-18 (₹ 15.80 thousands) after the ₹ 200 note was introduced in 2017.

Volume of FICN of denomination ₹ 500 (Old) detected in the banking system

317567
301678
281265 273923
246049 252269 261695

127918

971
11 9 14 6

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 500 (Old) detected in the banking
system was in 2016-17 (₹ 15.87 crores) followed by 2011-12 ( ₹ 15.08 crores) and
2012-13 (₹ 14.06 crores) while it was the least in 2010-11 ( ₹ 12.30 crores) excluding
detections after its demonetisation in the year 2016.

Page | 69
 Volume of FICN of denomination ₹ 500 (New) detected in the banking system

91110

79669

39453

30054
21865

9892

199

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 500 (New) detected in the banking
system was in 2022-23 (₹ 4.55 crores) followed by 2021-22 ( ₹ 3.98 crores) and 2020-
21 (₹ 1.97 crores) while it was the least in 2017-18 (₹ 12.30 crores) excluding the
detection of 2016-17 (₹ 99.50 thousands) after the ₹ 500 note was introduced in 2016.

Volume of FICN of denomination ₹ 1000 detected in the banking system

256324

143099
103611

131190
110035
98459
83280

54112
717

72 2 11 482

2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 1000 detected in the banking system
was in 2016-17 (₹ 25.63 crores) followed by 2015-16 (₹ 14.30 crores) and 2014-15 ( ₹
13.11 crores) while it was the least in 2010-11 (₹ 5.41 crores) excluding detections after
its Demonetisation in the year 2016.

Page | 70
 Volume of FICN of denomination ₹ 2000 detected in the banking system

21847

17929
17020

13604

9806
8798

638
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

(Source: RBI Annual Report)

 The highest amount of FICN of denomination ₹ 2000 detected in the banking system
was in 2018-19 (₹ 4.36 crores) followed by 2017-18 (₹ 3.58 crores) and 2019-20 ( ₹
3.40 crores) while it was the least in 2020-21 (₹ 1.75 crores) excluding the detection of
2016-17 (₹ 12.76 lakhs) after the ₹ 2000 note was introduced in 2016.

Page | 71
6.4 Counterfeit currency reports

Total Counterfeit currency reports (Year-wise)

733508

410899
362371 353837 353795
327382 331682
301804
251448 262164
220538
188184
127781

2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
10 11 12 13 14 15 16 17 18 19 20 21 22

(Source: Financial Intelligence Unit, India)

 The highest number of Counterfeit currency reports were received by Financial

Intelligence Unit of India during 2016-17 (7.33 lakh reports) followed by 2015-16 (4.10
lakh reports) and 2012-13 (3.62 lakh reports) while it was the least during 2009-10 (1.27
lakh reports).

Source of Counterfeit currency reports

6 lakh

3.5 lakh 3.7 lakh

3.1 lakh 3.3 lakh
2.8 lakh 2.6 lakh
2.4 lakh 2.5 lakh
2.2 lakh
1.9 lakh
1.6 lakh
1.2 lakh

2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
10 11 12 13 14 15 16 17 18 19 20 21 22

Public Sector Banks Others Private Sector Banks

(Source: Financial Intelligence Unit, India)

 The highest number of Counterfeit currency reports were received by Financial

Intelligence Unit of India from Private sector banks (88.71 %) followed by public sector
banks (7.67 %) from a total of 42.25 lakh Counterfeit currency reports received during
the period ranging from 2009-10 to 2021-22.

Page | 72
 Private sector banks reported highest number of Counterfeit currency reports during
2016-17 (6 lakh reports) followed by 2015-16 (3.7 lakh reports) and 2012-13 (3.5 lakh
reports) while it was the least during 2009-10 (1.2 lakh reports).

Source of Counterfeit currency reports

(Excluding private sector banks)

1 lakh

60.7 k

29 k 32.3 k
25.4 k
14.1 k 16.2 k 15.9 k 17.3 k
2.6 k 5.7 k
1.3 k 1.8 k

2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
10 11 12 13 14 15 16 17 18 19 20 21 22

Public Sector Banks Others

(Source: Financial Intelligence Unit, India)

 Public sector banks reported highest number of Counterfeit currency reports during
2016-17 (1.01 lakh reports) followed by 2017-18 (60.76 thousand reports) and 2018-19
(32.34 thousand reports) while it was the least during 2009-10 (1.39 thousand reports).

Note: According to annual report of Financial Intelligence Unit of India, the reporting
entities are listed under the categories of banks, financial institutions, financial
intermediaries and designated non-financial business and professions.

Page | 73
6.5 Relationship between counterfeit currency and currency in circulation

No. of counterfeits detected in Banking system per million notes in circulation

8.1
7.5 7.6
7.1 7.1 7.0
6.7 6.8
6.3
5.7
5.4
4.9 5.1
4.4

3.2 3.3
2.9
2.7 2.6 2.6

1.7 1.8 1.7

2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

(Source: RBI Annual Report)

 The number of Counterfeit notes per million notes in circulation was highest at about 8
counterfeits per million notes in circulation during the year 2008-09 followed by about 7
counterfeits per million notes in circulation during 2009-10, 2011-12, 2014-15, 2015-16
and 2016-17, about 6 counterfeits per million notes in circulation during 2010-11, 2012-
13 and 2013-14, about 5 counterfeits per million notes in circulation during 2002-03,
2003-04 and 2017-18, about 4 counterfeits per million notes in circulation during 2004-
05 and 2007-08, about 3 counterfeits per million notes in circulation during 2001-02 and
2005-06, about 2 counterfeits per million notes in circulation during 2000-01, 2006-07,
2018-19 and 2019-20 and the least of about 1 counterfeit per million notes in circulation
during 2020-21, 2021-22 and 2022-23.

Page | 74
Regression analysis for pre-demonetisation period (April 1999 to March 2016)

Regression analysis was carried out with value of counterfeit currency detected in the
banking system as the dependent variable and value of currency in circulation as the
independent variable for the period between April 1999 and March 2016 and the results
of the analysis are given in Figure 4.

The regression analysis shows that 92.83 % (as observed from the R square value)
variation in Counterfeit currency could be explained by changes in currency in
circulation. The p-value observed is approximately zero which shows that currency in
circulation is highly significant in determining counterfeit currency.

Thus, the null hypothesis which states that there is no statistically significant relationship
between currency in circulation and counterfeit currency is rejected and the alternate
hypothesis which states that there is a statistically significant relationship between
currency in circulation and Counterfeit currency is accepted.

The regression equation explaining the relationship between the variables is:

Counterfeit currency = -39330601.53224 + 0.00002 * currency in circulation

Although there are many other factors affecting counterfeit currency apart from currency
in circulation, but according to the given equation, it can be inferred that quantum of
counterfeit currency would be reduced by reducing the quantum of currency in
circulation during the period from April 1999 to March 2016.

Figure 4: Results of the regression analysis between counterfeit currency and currency
in circulation for the period April 1999 to March 2016 (Appendix: Table 9)

Regression Statistics
Multiple R 0.96353
R Square 0.92839
Adjusted R Square 0.92362
Standard Error 30363187.340
28
Observations 17.00000
ANOVA
df SS MS F
Regression 1.00000 179289240487439000.00 179289240487439000.00 194.473
000 000 09
Residual 15.00000 13828847181916400.000 921923145461091.00000
00
Total 16.00000 193118087669355000.00
000

Coefficients Standard Error t Stat P-value

Page | 75
 Intercept - 13827670.51930 -2.84434 0.01231
39330601.532
24
Currency in 0.00002 0.00000 13.94536 0.00000
circulation

Regression analysis including demonetisation and post-demonetisation period

(April 2016 to March 2023)

Regression analysis was carried out with value of counterfeit currency detected in the
banking system as the dependent variable and value of currency in circulation as the
independent variable for the period between April 2016 and March 2023 and the results
of the analysis are given in Figure 5.

The regression analysis shows that 65.92 % (as observed from the R square value)
variation in counterfeit currency could be explained by changes in currency in
circulation. The p-value observed 0.02655 is less than 0.05 which shows that currency
in circulation is highly significant in determining counterfeit currency.

Thus, the null hypothesis which states that there is no statistically significant relationship
between currency in circulation and counterfeit currency is rejected and the alternate
hypothesis which states that there is a statistically significant relationship between
currency in circulation and counterfeit currency is accepted.

The regression equation explaining the relationship between the variables is:

Counterfeit currency = 523752785.83874 - 0.00002* currency in circulation

According to the given equation, there is an inverse relation between counterfeit

currency and currency in circulation. This has been observed because after 2016,
although the quantum of currency in circulation has increased, the quantum of
counterfeit currency detected in the banking system has decreased.

Figure 5: Results of the regression analysis between counterfeit currency and currency
in circulation for the period April 2016 to March 2023 (Appendix: Table 10)

Regression Statistics
Multiple R 0.81192
R Square 0.65921
Adjusted R Square 0.59106
Standard Error 89228529.24161
Observations 7.00000

ANOVA
df SS MS F

Page | 76
Regression 1.00000 77005412809549900.00000 77005412809549900.0000 9.6719
0 4
Residual 5.00000 39808652153101000.00000 7961730430620210.00000
Total 6.00000 116814064962651000.0000
0

Coefficients Standard Error t Stat P-value

Intercept 523752785.8387 125161903.62635 4.18460 0.0086
4 2
Currency in -0.00002 0.00000 -3.10997 0.0265
circulation 5
6.6 Findings and conclusions

 Uttar Pradesh had the highest number of FICN cases (572 cases) reported during the
period ranging from 2017 to 2021. The highest number of FICN cases reported during a
particular year was also in Uttar Pradesh (228 cases in the year 2018).

 Maharashtra had the highest volume and value of FICN seizures during the period
ranging from 2017 to 2021, with FICN seizure of volume 7.89 lakh notes and value ₹
88.84 crores.

 The highest number of cases of FICN in Districts under RBI Kanpur’s jurisdiction
during the period 2017 to 2021 were reported in the year 2018 (266 cases) and have
reduced ever since from 49 cases in 2019 and 28 cases in 2020 to 30 cases in 2021.

 Kanpur Nagar had the highest number of FICN cases reported (82 cases) considering
Total FICN cases reported during 2017 to 2021 both in districts under RBI Kanpur’s
jurisdiction as well as districts of Uttar Pradesh.

 Dehradun had the highest number of FICN cases (31 cases) considering total FICN
cases reported during 2017 to 2021 in districts of Uttarakhand.

 Total amount of Fake Indian Currency seized during 2017 to 2021 was of the face
value of ₹ 184.01 crores and the volume of 20.45 lakh notes.

 Fake Indian Currency Notes of denomination ₹ 500 has been the most counterfeited
currency note with seizures of volume 5.86 lakh notes i.e., a face value of ₹ 29.33
crores during the period 2017 to 2021 along with detections of volume 23.35 lakh notes
i.e., a face value of ₹ 116.75 crores in the banking system during April 2010 to March
2023.

 In 2016-17, Financial Intelligence Unit of India received the highest number of

Counterfeit Currency Reports i.e., 7.33 lakh reports.

Page | 77
 About 88 % of the reports received by Financial Intelligence Unit of India were from
Private Sector Banks during the period 2009-10 to 2021-22.

 In the pre-demonetisation period from April 1999 to March 2016, the regression
analysis showed a directly proportional relationship model such that with decrease in
currency in circulation the quantum of counterfeit currency would decrease.

 However, the regression analysis on the data from April 2016 to March 2023 which
includes the demonetisation and post-demonetisation period, there was an inverse
relationship between counterfeit currency and currency in circulation because there has
been a decline in counterfeit currency even with increase in currency in circulation
during the given period.

Page | 78
7. PRIMARY DATA ANALYSIS OF THE SURVEY ON “AWARENESS OF
EXISTING SECURITY FEATURES OF BANKNOTES”
The primary data was collected through a detailed questionnaire consisting of personal
and demographic information along with questions related to identification of security
features of banknotes and feedback regarding Fake Indian Currency Notes through
google forms as well as personal interview. A total of 354 responses collected were
used for analysis and interpretation of results. The questionnaire has been attached in
the appendix as Figure 12.

Average Median Range

3.006 / 9 points 2 / 9 points 0 – 9 points

 On an average, respondents were able to correctly identify 3 out of 9 security features

provided in the questionnaire. The 9 security features were Bleed lines, See Through
Register, Latent image, Microletters, Security thread, Colour Shifting Ink (CSI), Intaglio
(Raised printing), Watermark and Omron anti-copy feature.

90

80 23.73%

70
No. of respondents

60 17.80%

50 14.69%
40

9.60% 10.17%
30

20 7.06%
6.21%
5.37% 5.08%
10
0.28%
0
0 1 2 3 4 5 6 7 8 9

No. of security features correctly identified

 About 23 % of the respondents were not able to identify even a single security feature
of currency notes while about 10 % of the respondents were able to identify all the
features correctly.

Page | 79
Demographic information:

i) Gender

 The proportion of male and female respondents was about 7:3.

Female
107
30.23%

Male
247
69.77%

ii) Age

 Majority (60.73 %) of the respondents belonged to the age group of 18 to 24 years.

250

60.73%
200 215
No of respondents

150

100
22.32%
79
50

5.08% 7.34% 3.95%

0.56% 18 26 14
0
2
Less than 18 18-24 25-34 35-44 45-54 More than 55
Age group

Page | 80
iii) Occupation

 Most of the respondents (60.17%) were students while about 25 % were salaried
employees (non-banking).

5.93% 0.85%
4.52%
Homemaker
2.54% Bank Employee
Business
Retired

Student
Salaried 60.17%
Em-
ployee
(Non-
Banking)
25.99%

iv) Educational qualification

 Majority (52.54 %) of the respondents were graduates followed by about 42 % of post

graduates.

10th Standard to Below 12th

Standard
12th Standard 1.13%
4.24%

Graduate
Post-Graduate or 52.54%
above
42.09%

Page | 81
v) Annual income

 Since most of the respondents were students, the annual income of about 51 % of
respondents was less than 3 lakhs followed by about 21 % with annual income of 3
lakhs to 6 lakhs, about 12 % with annual income of 6 lakhs to 9 lakhs, about 6 % with
annual income of 9 lakhs to 12 lakhs while about 3 % had annual income of more than
15 lakhs.

More than 15 lakhs

13
3.67%

3 lakhs to 6 lakhs
75
21.19%

Less than 3 lakhs

182
9 lakhs to 12 lakhs 51.41%
24
6.78%
6 lakhs to 9 lakhs
43
12.15%
12 lakhs to 15 lakhs
17
4.80%

Page | 82
vi) State / union territory of residence

 Highest number of respondents belonged to Uttar Pradesh (38 %) and Odisha (34 %)

Madhya Pradesh, 1% Haryana, 1%Kerala, 1%

Uttarakhand, 1%
Jharkhand, 2%
Delhi, 5%
Telangana, 1%
Bihar, 4%
Maharashtra, 3%
Rajasthan, 1% Assam
Uttar Pradesh,
Andhra Pradesh
38%
Gujarat
Chhattisgarh
Chandigarh
Odisha, 34%

Karnataka, 3%

West Bengal, 4%

How often do you handle or use banknotes in a day?

 About 34 % of the respondents handled or used banknotes 1 or 2 times in a day,

about 31 % used them less than once, about 19 % used them 3 or 4 times while about
14 % used them more than 4 times in a day.

Page | 83
 3 or 4 times; 69;
19.49%
Less than once;
110; 31.07%

1 or 2 times;
122; 34.46%More than 4
times; 53;
14.97%

Are you aware about the security features of Indian Currency Notes?

 Most of the respondents (83.05 %) claimed that they are aware about the security
features of Indian currency notes.

No, 60,
16.95%

Yes, 294,
83.05%

How did you become aware of these security features?

 Most of the respondents became aware of these security features through news
media (32.39 %) and online sources (32.06 %) while about 16 % became aware
through educational materials from RBI or other banks, about 13 % through RBI
website, while few became aware through educational institutes, word of mouth and
personal experience.

Page | 84
 Personal experience 1.16%

Sources of Information Word of mouth 1.33%

Unaware 3.32%

Educational Institute 0.17%

RBI Website 13.29%

Educational materials from RBI or other Banks 16.28%

Online 32.06%

News Media 32.39%

0 50 100 150 200 250

No. of responses

Do you think the security features of the banknotes are easy to identify?

 Most of the respondents (56.78 %) claimed that the security features of the banknotes
are easy to identify while the remaining (43.22 %) believed that they are not easy to
identify.

No; 153;
43.22%
Yes; 201;
56.78%

Select the security features you notice on receiving a banknote according to the
sequence mentioned

Page | 85
 176

121

102
90
80
63
56
52 55
43 46 43
30 32 29 33
22 24 Portrait of Mahatma19Gandhi
21 Watermark
17 13
Microletters Security Thread
First See Through Register
Second Bleed lines Third
Intaglio (Raised Printing) Colour changing ink

Security Feature Score Rank

Portrait of Mahatma Gandhi 692 1
Watermark 598 2
Security Thread 507 3
Colour changing ink 201 4
Intaglio (Raised Printing) 163 5
Bleed lines 159 6
Microletters 135 7
See Through Register 110 8
 The first security feature noticed by people on receiving a currency note is the portrait
of Mahatma Gandhi, followed by watermark (2 nd) and security thread (3rd).
Subsequently, colour changing ink is ranked as the 4th most noticed security feature
followed by intaglio (raised printing) (5th), bleed lines (6th), microletters (7th) while see
through register is the least noticed security feature among the following (8 th).

Note: (The ranks have been calculated by Point based ranking method with 3 points
assigned to the First, 2 to the Second and 1 to the Third Security feature respectively
which is noticed upon receiving the banknote.)

Are you familiar with the touch and feel of banknotes?

 Most of the respondents (78.81 %) claimed that they are familiar with the touch and
feel of banknotes.

Page | 86
 No, 75,
21.19%

Yes, 279,
78.81%

Do you check watermark of banknotes before accepting them?

 Most of the respondents (70.34 %) claimed that they check watermark of banknotes
before accepting them.

No; 105;
29.66%

Yes; 249;
70.34%

Do you check serial number of banknotes before accepting them?

Page | 87
 Most of the respondents (74.58 %) claimed that they do not check serial number of
banknotes before accepting them.

Yes; 90;
25.42%

No; 264;
74.58%

Which denominations of the banknotes do you check for genuineness before

accepting?

 Majority of the respondents (78.53 %) only check banknotes of denomination ₹ 500 for
genuineness before accepting while about 14 % check all the denominations.

100 / 200 None

4.24% 0.28%

All the denomina-

tions
14.97%

10 / 20 / 50
1.98%
500
78.53%

Page | 88
Are you aware of the RBI's efforts to promote awareness regarding security features of
Indian Currency notes?

 About 37 % of the respondents are slightly aware, about 27 % are moderately aware,
about 13 % are fairly aware, about 4 % are extremely aware while about 16 % are not at
all aware about the RBI’s efforts to promote awareness regarding security features of
Indian currency notes.

Fairly aware
13.84%
Extremely aware
4.80%

Slightly aware
37.85%

Not at all aware

16.38%

Moderately aware
27.12%

Have you ever encountered Fake Indian Currency Notes?

 About 50 % of the respondents claimed that they have encountered Fake Indian
Currency Notes.

Yes; 178; No; 176;

50.28% 49.72%

Page | 89
What was the denomination of the Counterfeit currency note you encountered?

 Most of the respondents encountered Fake Indian Currency Notes of denomination ₹

500 (78.29 %) followed by ₹ 100 (9.14 %) and ₹ 200 (5.14 %) along with few who
encountered Fake Indian Currency Notes of denomination ₹ 10, ₹ 20 and ₹ 50 (about 2
% each).

50; 4; 2.29% 20; 4; 2.29%

10; 5; 2.86%
200; 9; 5.14%

100; 16; 9.14%

500; 137; 78.29%

From where did you find the Fake Indian Currency Note?

 Most of the respondents received the Fake Indian Currency Notes during day-to-day
transactions between individuals (84.83 %) while some of them received them from
ATM (12.36 %) and bank (2.81 %).

Page | 90
 ATM, 12.36%

Bank, 2.81%

Day-to-day
transaction be-
tween individ-
uals, 84.83%

What step would you take if you encounter Fake Indian Currency Notes?

 Most of the respondents (46.33 %) would go to bank for exchange, while 21.75 %
don’t know what to do upon encountering Fake Indian Currency Notes. About 31 % of
the respondents selected the most suitable course of action that is to inform police.

Don't know what

to do; 77; 21.75%

Go to bank for
exchange; 164;
46.33%

Inform Police;
113; 31.92%

Have you ever faced any situation leading to unacceptance of coins?

 Majority of the respondents (79.38 %) have faced problems during transaction of

coins.

Page | 91
 No; 73;
20.62%

Yes; 281;
79.38%

What could be the reason behind unacceptance of coins?

 The major reason behind unacceptance of coins has been doubts regarding
genuineness of coins according to about 48 % of the respondents.

Not aware; 2; 0.57%

Issues in
Deposit; 73;
Inconvenient to 20.68%
carry or store; 108;
30.59%

Not sure if it is legal tender;

170; 48.16%

Have you received any communication or alerts from the RBI regarding counterfeiting
prevention?

Page | 92
 Although most of the respondents agreed that they receive alerts from RBI but about
54 % of the respondents didn’t receive any alerts or communication from RBI
specifically regarding counterfeiting prevention.

Yes; 160;
45.20%
No; 194;
54.80%

Are you aware about the legal consequences of counterfeiting in India?

 About 25 % of the respondents are not at all aware about the legal consequences of
counterfeiting in India.

Extremely aware; 14; 3.95%

Moderately aware;
Not at all aware;
86; 24.29%
90; 25.42%

Fairly aware; 49;

13.84%
Slightly aware; 115; 32.49%

Do you think increased use of digital transactions have been successful in reducing the
problems associated with counterfeiting?

Page | 93
 Majority of the respondents (77.97 %) agreed that digital transactions have
successfully reduced the problems associated with counterfeiting currency.

Don't know; 41;

11.58% No; 37; 10.45%

Yes; 276; 77.97%

According to you what step should be taken to reduce problems of counterfeiting?

 About 37 % of the respondents wanted strict action on fraudsters, about 29 % wanted

awareness through television and print media advertisements, about 28 % wanted
awareness through social media while about 4 % were in favour of regular
demonetisation.

Personal experience 1.16%

Word of mouth 1.33%

Unaware 3.32%
Source of information

Educational Institute 0.17%

RBI Website 13.29%

Educational materials from RBI or other Banks 16.28%

Online 32.06%

News Media 32.39%

0 50 100 150 200 250

No. of responses

Page | 94
7.1 Relationship between awareness of security features of currency notes and
age

Regression analysis was carried out with scores obtained in identification of security
features of banknotes as the dependent variable and age as the independent variable
and the results of the analysis are given in Figure 6.

The regression analysis shows the p-value observed 0.02046 is less than 0.05. Thus,
the null hypothesis which states that there is no statistically significant relationship
between awareness of security features and age is rejected and the alternate
hypothesis which states that there is a statistically significant relationship between
awareness of security features and age is accepted.

The regression equation explaining the relationship between the variables is:

Scores obtained out of 9 = 4.04499 - 0.03736* age

According to the given equation, there is an inverse relation between awareness of

security features and age. This has been observed because people of higher age have
the tendency to be less aware about the security features of currency notes.

Figure 6: Results of the regression analysis between awareness of security features

and age

df SS MS F
Regressio 45.7111 5.4207
n 1.00000 45.71115 5 6
Residual 352.00000 2968.27755 8.43261
Total 353.00000 3013.98870

Coefficient Standard P-
s Error t Stat value
0.0000
Intercept 4.04499 0.47233 8.56390 0
- 0.0204
Age -0.03736 0.01604 2.32825 6

Page | 95
 7.2 Relationship between awareness of security features of currency notes and
annual income

Regression analysis was carried out with scores obtained in identification of security
features of banknotes as the dependent variable and annual income as the independent
variable and the results of the analysis are given in Figure 7.

The regression analysis shows the p-value observed is approximately equal to 0. Thus,
the null hypothesis which states that there is no statistically significant relationship
between awareness of security features and annual income is rejected and the alternate
hypothesis which states that there is a statistically significant relationship between
awareness of security features and annual income is accepted.

Figure 7: Results of the regression analysis between awareness of security features

and annual income

df SS MS F
Regression 1.00000 16.90692 16.90692 1.98568
Residual 352.00000 2997.08178 8.51444
Total 353.00000 3013.98870

Standard
Coefficients Error t Stat P-value
0.0000000000000002647
Intercept 2.63361 0.30620 8.60087 1
Average Annual 0.00000075431661447370
Income 90 0.00000 1.40914 0.15968

The regression equation explaining the relationship between the variables is:

Scores obtained out of 9 = 2.63361 + 0.0000007543166144737090* annual income

According to the given equation, there is direct relation between awareness of security
features and annual income. This signifies that, people having higher annual income
have the tendency to be more aware about the security features of currency notes.

Page | 96
7.3 Relationship between awareness of security features and gender

Chi-square test for independence was carried out to test the relationship between
awareness of security features of banknotes and gender and the results of the analysis
are given in Figure 8.

The test shows the asymptotic significance or p-value greater than 0.05. Thus, the null
hypothesis which states that there is no statistically significant relationship between
awareness of security features and gender has been accepted.

Figure 7: Results of the chi-square test for independence between awareness of

security features and gender

Are you aware about the s e curity fe ature s of Indian Curre ncy Note s ? * Ge nde r Cros s tabulation

Gender
Female Male Total
Are you aware about the No Count 17 43 60
security features of Indian
Expected Count 18.1 41.9 60.0
Currency Notes?
Yes Count 90 204 294
Expected Count 88.9 205.1 294.0
Total Count 107 247 354
Expected Count 107.0 247.0 354.0

Chi-S quare Te s ts

Asymptotic
Significance (2- Exact Sig. (2- Exact Sig. (1-
Value df sided) sided) sided)
Pearson Chi-Square .123 a 1 0.726
b 0.038 1 0.845
Continuity Correction
Likelihood Ratio 0.124 1 0.725
Fisher's Exact Test 0.761 0.428
N of Valid Cases 354

Page | 97
7.4 Relationship between awareness of security features and familiarity with
touch and feel of banknotes

Chi-square test for independence was carried out to test the relationship between
awareness of security features of banknotes and familiarity with touch and feel of
banknotes and the results of the analysis are given in Figure 9.

The test shows the asymptotic significance or p-value approximately equal to zero.
Thus, the null hypothesis which states that there is no statistically significant relationship
between awareness of security features and familiarity with touch and feel of banknotes
is rejected and the alternate hypothesis which states that there is a statistically
significant relationship between awareness of security features and familiarity with touch
and feel of banknotes has been accepted.

Figure 9: Results of the chi-square test for independence between awareness of

security features and familiarity with touch and feel of banknotes

Are you aware about the s e curity fe ature s of Indian Curre ncy Note s ? * Are you familiar with the touch and
fe e l of banknote s ? Cros s tabulation
Are you familiar with the touch
and feel of banknotes?
No Yes Total
Are you aware about the No Count 27 33 60
security features of Indian Expected Count 12.7 47.3 60.0
Currency Notes?
Yes Count 48 246 294
Expected Count 62.3 231.7 294.0
Total Count 75 279 354
Expected Count 75.0 279.0 354.0

Chi-S quare Te s ts

Asymptotic
Significance (2- Exact Sig. (2- Exact Sig. (1-
Value df sided) sided) sided)
Pearson Chi-Square 24.536a 1 0.000

Continuity Correctionb 22.848 1 0.000

Likelihood Ratio 21.360 1 0.000
Fisher's Exact Test 0.000 0.000
N of Valid Cases 354

Page | 98
7.5 Relationship between awareness of security features and receiving
communication or alerts from RBI regarding counterfeiting prevention

Chi-square test for independence was carried out to test the relationship between
awareness of security features of banknotes and receiving communication or alerts from
RBI regarding counterfeiting prevention and the results of the analysis are given in
Figure 10.

The test shows the asymptotic significance or p-value 0.009 which is less than 0.05.
Thus, the null hypothesis which states that there is no statistically significant relationship
between awareness of security features and receiving communication or alerts from RBI
regarding counterfeiting prevention is rejected and the alternate hypothesis which states
that there is a statistically significant relationship between awareness of security
features and receiving communication or alerts from RBI regarding counterfeiting
prevention has been accepted.

Figure 10: Results of the chi-square test for independence between awareness of
security features and receiving communication or alerts from RBI regarding
counterfeiting prevention

Are you aware about the s e curity fe ature s of Indian Curre ncy Note s ? * Have you re ce ive d any
communication or ale rts from the RBI re garding Counte rfe iting pre ve ntion? Cros s tabulation

Have you received any

communication or alerts from the
RBI regarding Counterfeiting
prevention?
No Yes Total
Are you aware about the No Count 42 18 60
security features of Indian
Expected Count 32.9 27.1 60.0
Currency Notes?
Yes Count 152 142 294
Expected Count 161.1 132.9 294.0
Total Count 194 160 354
Expected Count 194.0 160.0 354.0

Chi-S quare Te s ts

Asymptotic
Significance (2- Exact Sig. (2- Exact Sig. (1-
Value df sided) sided) sided)
Pearson Chi-Square 6.737a 1 0.009
b 6.018 1 0.014
Continuity Correction
Likelihood Ratio 6.944 1 0.008
Fisher's Exact Test 0.010 0.007
N of Valid Cases 354

Page | 99
7.6 Relationship between awareness of security features and ease of
identification of security features

Chi-square test for independence was carried out to test the relationship between
awareness of security features of banknotes and ease of identification of security
features and the results of the analysis are given in Figure 11.

The test shows the asymptotic significance or p-value approximately equal to zero.
Thus, the null hypothesis which states that there is no statistically significant relationship
between awareness of security features and ease of identification of security features is
rejected and the alternate hypothesis which states that there is a statistically significant
relationship between awareness of security features and ease of identification of
security features has been accepted.

Figure 11: Results of the chi-square test for independence between awareness of
security features and ease of identification of security features

Are you aware about the s e curity fe ature s of Indian Curre ncy Note s ? * Do you think the s e curity fe ature s of
the banknote s are e as y to ide ntify? Cros s tabulation

Do you think the security features

of the banknotes are easy to
identify?
No Yes Total
Are you aware about the No Count 52 8 60
security features of Indian
Expected Count 25.9 34.1 60.0
Currency Notes?
Yes Count 101 193 294
Expected Count 127.1 166.9 294.0
Total Count 153 201 354
Expected Count 153.0 201.0 354.0

Chi-S quare Te s ts

Asymptotic
Significance (2- Exact Sig. (2- Exact Sig. (1-
Value df sided) sided) sided)
Pearson Chi-Square 55.569 a 1 0.000
b 53.458 1 0.000
Continuity Correction
Likelihood Ratio 58.807 1 0.000
Fisher's Exact Test 0.000 0.000
N of Valid Cases 354

Page | 100
Page | 101
7.7 Remarks of respondents

Respondents have acknowledged the steps that are being taken by RBI in order to
increase awareness of security features of currency notes and have shown enthusiasm
towards opportunities to become more aware with the help of advertisements, webinars,
awareness campaigns on digital platforms demanding more attention towards rural
areas and senior citizens. The respondents are willing to learn more about security
features of currency notes in order to become vigilant and develop the ability to
distinguish between genuine and fake currency notes.

They have also pointed out the immense impact digital transactions have had on the
problem of counterfeiting with a majority of around 77 % in favour of the opinion that
digital transactions have reduced the problems of counterfeiting and in the future
dependence on cash to the minimum extent possible along with maximum digital
transactions would help in further reducing the menace of counterfeiting currency.

7.8 Qualitative findings

The respondents in some cases are aware about the security feature and the method to
verify genuineness of banknotes through them but are not familiar with the terminology
of the security feature. Some respondents figured out the name of the security feature
by careful observation of banknotes during the survey. About 18 % of the respondents
who claimed to be aware about the security features of banknotes were unable to
identify even a single security feature correctly. Most of the respondents (about 78 %)
only check banknotes of denomination ₹ 500 for genuineness which renders lower
denomination notes vulnerable during transactions.

Page | 102
7.9 Findings and conclusions

 It was found that females with a mean score of 3.74 were more aware about security
features of banknotes than males with a mean score of 2.68. However, there is no
statistically significant relationship between awareness of security features of banknotes
and gender.

 Respondents in the age group 25 to 34 years were the most aware with mean score of
3.36 followed by 18 to 24 years with a mean score of 3.13, more than 55 years with a
mean score of 2.28 and 35 to 44 years with a mean score of 2.16 while those in the age
group 45 to 54 years were the least aware with a mean score of 1.76. It was found
through regression analysis that people belonging to higher age groups were less
aware about the security features of banknotes.

 Bank employees with a mean score of 3.25 were most aware about security features
of banknotes followed by homemakers having mean score of 3.11, students with a
mean score of 3.07, salaried employees (non-banking) with a mean score of 3.0 and
those engaged in business had a mean score of 2.28 while retired persons were the
least aware having a mean score of 1.33.

 Graduates and post graduates had almost same level of awareness having same
mean score of 3.04 with graduates having a slightly higher mean score of 3.048
compared to mean score of 3.046 of post graduates. Those with educational
qualification as 12th standard had a mean score of 2.2 while those with educational
qualification between 10th Standard to 12th standard had a mean score of 2.5.

 Respondents with annual income between 9 lakhs to 12 lakhs were the most aware
with a mean score of 3.75 followed by 12 lakhs to 15 lakhs with a mean score of 3.70,
More than 15 lakhs with a mean score of 3.53, less than 3 lakhs with a mean score of
2.91 and 6 lakhs to 9 lakhs with a mean score of 2.88 while those with annual income
between 3 lakhs to 6 lakhs were the least aware with a mean score of 2.81. It was found
through regression analysis that people with higher annual income were more aware
about the security features of banknotes.

 Respondents of Odisha had a mean score of 2.81 while respondents of Uttar Pradesh
had a mean score of 3.14. Respondents of Bhubaneswar had a mean score of 2.4,
respondents of Kanpur had a mean score of 2.53 while respondents of Varanasi had a
mean score of 3.16.

Page | 103
 Respondents who handled or used currency notes 3 or 4 times a day were the most
aware with mean score of 3.11 followed by 1 or 2 times with a mean score of 3.06 and
less than once with a mean score of 2.92 while those who handled or used currency
notes more than 4 times a day were the least aware with a mean score of 2.88.

 Respondents who claimed that they were aware of security features had a mean
score of 3.28 while those who claimed that they were not aware of security features had
a mean score of 1.63.

 Respondents who claimed that the security features of banknotes were easy to
identify were more aware with a mean score of 3.35 while those who claimed that
security features of banknotes were not easy to identify had a mean score of 2.54. It
was found that there is a statistically significant relationship between awareness of
security features of banknotes and ease of identification of security features of
banknotes.

 Respondents who were familiar with the touch and feel of banknotes were more aware
with a mean score of 3.16 while those who were not familiar had a mean score of 2.41.
It was found that there is a statistically significant relationship between awareness of
security features of banknotes and familiarity with touch and feel of banknotes.

 Respondents who checked watermark of banknotes for genuineness before accepting

were more aware with a mean score of 3.19 while those who did not check watermark
had a mean score of 2.56.

 Respondents who were not at all aware about RBI’s efforts to promote awareness
regarding security features of banknotes were the least aware with a mean score of 2
while those who were fairly aware of the RBI’s efforts were the most aware with a mean
score of 3.73 followed by those were moderately aware of RBI’s efforts with a mean
score of 3.45 and those who were slightly aware of RBI’s efforts with a mean score of
3.05.

 Respondents who received communication or alerts from RBI regarding counterfeiting

prevention were more aware with a mean score of 3.08 while those who didn’t receive
any alerts from RBI had a mean score of 2.93. It was found that there is a statistically
significant relationship between awareness of security features of banknotes and
receiving communication or alerts from RBI regarding counterfeiting prevention.

Page | 104
 8. LIMITATIONS OF THE STUDY
Due to time constraints and choice of convenience-based sampling, the number of
responses collected through the questionnaire on “awareness of security features of
banknotes” is limited i.e., only 354 responses were collected through google forms and
personal interview. Thus, in order to extrapolate and generalize the findings of the study
with respect to the general public with greater accuracy, a larger sample size is
required, which in turn can lead to variations in the results.

The study has taken into account, data related to seizures and cases of FICN reported
from the National Crime Records Bureau Database for the time period of 2017 to 2021
due to which the analysis of recent trends in seizures and reporting of cases of FICN
after 2021 has not been possible.

The data related to seizures of FICN is limited to seizures in different states of India as
the district wise data related to seizures of FICN is not available on the public domain.

Page | 105
 9. RECOMMENDATIONS
Based on the findings of the survey on “awareness of existing security features of
banknotes”, the level of awareness of security features of banknotes has scope of
further improvement for which a targeted approach can be taken up in creating
awareness among the groups of people who were found to be less aware, in order to
facilitate them in distinguishing between genuine and fake currency notes which can
help in preventing problems associated with counterfeiting of currency.

1. The target population with lower levels of awareness were found to be

i) Persons with age above 35 years

ii) Retired persons

iii) Persons with educational qualification of up to 12th standard

iv) Persons with annual income between 3 lakhs to 6 lakhs

v) Persons who are not familiar with the touch and feel of banknotes

2. Most of the respondents i.e., about 50 % have encountered Fake Indian Currency
Notes out of which about 84 % have received FICN through day-to-day transactions
between individuals. So, it is necessary for the general public to remain vigilant during
receiving banknotes and check the banknotes for genuineness before accepting.

3. Most of the respondents are not aware of the right step to take upon encountering
Fake Indian Currency Notes with only about 30 % choosing to inform the police while
about 46 % choosing to go to bank for exchange and about 21 % not at all aware of
what step should be taken. So, it is crucial to spread awareness regarding step to be
taken upon encountering Fake Indian Currency Notes.

4. A major problem being faced by about 80 % of the respondents is unacceptance of

coins and about 48 % have faced this problem due to doubts regarding genuineness of
coins.

5. About 25 % of the respondents are not at all aware about the legal consequences of
counterfeiting of currency so awareness regarding the laws and regulations as well as
legal consequences needs to be spread.

6. The major sources of information about security features of banknotes for the
respondents have been through online (about 32 %) and news media (about 32 %)
which can be considered for transmission of information regarding security features.

Page | 106
7. Although, the number of public sector banks are higher, the reporting of counterfeit
cases by them is much lower than private sector banks who report about 88 % of the
total counterfeit currency reports as per Financial Intelligence Unit of India. Hence,
public sector banks need to be encouraged to improve reporting of counterfeit cases.

8. Hotline numbers dedicated for reporting of Fake Currency Notes by the general
public have been used by central banks in different countries like Bank of England and
Central Bank of Sri Lanka. It can be considered in order to increase reporting of
counterfeit currency.

9. The United States Secret Service has a dedicated website named USDollars for
reporting of suspected counterfeit currency by the general public which includes step by
step instructions for reporting, receiving information about the suspected counterfeit
notes, tracking status and generating reports of the counterfeit notes sent to the United
States Secret Service. Similar approach can be considered to quickly identify and
counter-act on the counterfeiting activities.

Page | 107
 10. REFERENCES
1. Bruna A. et. al. (2013). Forgery detection and value identification of Euro banknotes.
Sensors (Basel), 13 (2), 2515-2529.

2. Chambers J. et. al. (2014). Currency security and forensics: A survey. Multimedia
Tools & Applications, 74.

3. Silva C. et. al. (2014). Near Infrared Hyperspectral imaging for forensic analysis of
document forgery. The Analyst, 139 (20).

4. Alex D. et. al. (2019). Counterfeit Currency detection based on fluorescence in HSV
Color space. International Journal of Recent Technology and Engineering, 8 (1).

5. Desai S. et. al. (2022). Examination of Indian Currency by using Raman

spectroscopy. International Journal of Engineering, Applied Sciences & Technology, 7
(2), 352-355.

6. Susmitha et. al. (2023). Counterfeit currency detection using machine learning.
International Journal of Research Trends and Innovations, 8 (4).

7. Is that Real? Identification & Assessment of the Counterfeiting Threat for US

Banknotes. National Research Council of the National Academies, Washington DC.

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16 at 11.34 AM)

9. https://csirnews.niscpr.res.in/home/article/1#:~:text=Scientists%20at%20the%20CSIR
%2DNational,prevent%20counterfeiting%20of%20currency%20notes. (Accessed on 2023, July
14 at 03.12 PM)

10. https://www.indiatoday.in/india/story/fake-indian-currency-crore-face-value-seized-in-surat-
accused-arrested-2008401-2022-10-04 (Accessed on 2023, June 27 at 10.41 AM)

11. https://ncrb.gov.in/en/Crime-in-India-2021 (Accessed on 2023, May 15 at 11.15 AM)

12.
https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0ANNUALREPORT20222322A548270D614
0D998AA20E8207075E4.PDF (Accessed on 2023, June 12 at 04.24 PM)

13. https://fiuindia.gov.in/pdfs/downloads/AnnualReport2021_22.pdf (Accessed on 2023, May

25 at 02.43 PM)

14. https://dri.nic.in/writereaddata/2021_2022%20REPORT%20FINAL_14.pdf (Accessed on

2023, June 23 at 03.47 PM)

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pdf (Accessed on 2023, May 19 at 12.11 PM)

16. https://www.bundesbank.de/resource/blob/905558/ad932e0cc62044f541770fa9905beb6a/
mL/2022-annual-report-data.pdf (Accessed on 2023, May 19 at 12.23 PM)

17. https://www.bankofcanada.ca/publications/annual-reports-quarterly-financial-reports/annual-
report-2022/ (Accessed on 2023, May 19 at 12.41 PM)

18. https://www.rba.gov.au/publications/annual-reports/rba/2022/pdf/rba-annual-report-2022.pdf
(Accessed on 2023, May 19 at 12.50 PM)

19. https://www.federalreserve.gov/boarddocs/rptcongress/counterfeit/counterfeit2006.pdf
(Accessed on 2023, May 19 at 02.49 PM)

20. https://www.rba.gov.au/publications/rdp/2015/pdf/rdp2015-05.pdf (Accessed on 2023, July

06 at 11.24 AM)

21. https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/3WPSN190313.PDF (Accessed on 2023,

June 13 at 04.12 PM)

22. https://www.rba.gov.au/publications/bulletin/2019/sep/pdf/a-brief-history-of-currency-
counterfeiting.pdf (Accessed on 2023, June 13 at 04.35 PM)

23. https://onlinelibrary.wiley.com/doi/epdf/10.1002/anie.200904538 (Accessed on 2023, July 12

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Solutions.pdf (Accessed on 2023, June 27 at 12.03 PM)

11. APPENDIX

Page | 109
Table 9: Value of FICN detected in the banking system and value of currency in
circulation (April 1999 to March 2016)

Year Value of FICN (Rs.) Value of Notes in circulation

1999-2000 10344700 2014861142000
2000-01 32859860 2263748289000
2001-02 33718270 2446550000000
2002-03 35174760 2750960000000
2003-04 27600000 3197610000000
2004-05 24379460 3612270000000
2005-06 17675150 4219110000000
2006-07 23190300 4961380000000
2007-08 54991180 5815980000000
2008-09 155705000 6811130000000
2009-10 171200000 7882990000000
2010-11 190110410 9358560000000
2011-12 247087230 10528000000000
2012-13 250409587 11648000000000
2013-14 248402660 12829000000000
2014-15 286694200 14289000000000
2015-16 296417110 16415000000000

Table 10: Value of FICN detected in the banking system and value of currency in
circulation (April 2016 to March 2023)

Year Value of FICN (Rs.) Value of Notes in circulation

2016-17 434675310 13102000000000
2017-18 233491960 18037000000000
2018-19 82359960 21109000000000
2019-20 74803540 24209750000000
2020-21 54500080 28268630000000
2021-22 82593560 31057210000000
2022-23 79871120 33482280000000

Figure 12: Questionnaire on “awareness of security features of banknotes”

Page | 110
 QUESTIONNAIRE ON SECURITY FEATURES OF BANKNOTES

Block 1: Identification of the Respondent:

1. Name of the respondent
2. Gender Male Female 3. Age (in completed years)
4. Occupation
Salaried Employee Bank Employee Business Student Homemaker Daily Retired
(Non-Banking) worker
5. Educational Qualification
Illiterate Below 5th Std. 5th Std. to Below 10th Std. 10th Std. to Below 12th Std.
12th Std. Graduate Post Graduate and above
6. Annual Income (in Rupees)
Less than 3 lakhs 3 lakhs to 6 lakhs 6 lakhs to 9 lakhs
9 lakhs to 12 lakhs 12 lakhs to 15 lakhs More than 15 lakhs

Block 2: Awareness of security features:

1. How often do you handle or use banknotes in a day?
Less than once 1 or 2 times 3 or 4 times More than 4 times
2. Are you aware about the security features of Indian Currency Notes? Yes No
3. How did you become aware of these security features? (Select all that apply)
RBI Website Educational materials from RBI or other banks News Media Online
4. Do you think the security features of the banknotes are easy to identify? Yes No
5. Select the security features you notice on receiving a banknote according to the sequence mentioned (Select Three
Only)
Portrait of Intaglio See
Security Colour Bleed
Watermark Mahatma (Raised Through Microletters
Thread changing ink Lines
Gandhi Printing) Register
First
Second
Third
6. Are you familiar with the touch and feel of banknotes? Yes No
7. Do you check watermark of banknotes before accepting them? Yes No
8. Do you check serial number of banknotes before accepting them? Yes No
9. Which denominations of the banknotes do you check for genuineness before accepting?
500 100 / 200 10/ 20/ 50 All of the denominations
10. Identify the security features of the Banknote as provided in the image

Choose the appropriate Security feature from the options provided below according to the number highlighted in the
image

Page | 111
 [Security Thread, Watermark, Intaglio (Raised) Printing, Microletters, Omron anti-copy feature,
See Through Register, Colour changing ink, Latent image, Bleed lines]
[1] [2] [3] [4] [5]
[6] [7] [8] [9]

Block 3: Feedback:
1. Are you aware of the RBI's efforts to promote awareness regarding security features of Indian Currency notes?
Not at all aware Slightly aware Moderately aware Fairly aware Extremely aware
2. (a) Have you ever encountered Fake Indian Currency Notes? Yes No
(b) Denomination of the Fake Indian Currency note 500 200 100 50 20 10
(c) From where did you find the Fake Indian Currency Note? ATM Bank General Transaction
3. Have you ever faced the problem of Fake Indian Currency Notes during ATM Transactions? Yes No
4. What step would you take if you encounter Fake Indian Currency Notes?
Don’t know what to do Inform Police Go to bank for exchange
5. Have you ever faced any situation leading to unacceptance of coins? Yes No
6. What could be the reason behind unacceptance of coins?
Not sure if it is legal tender Inconvenient to carry/ store Issues in Deposit
7. Have you received any communication or alerts from the RBI regarding Counterfeiting
Yes No
prevention?

8. Are you aware about the legal consequences of Counterfeiting in India?

Not at all aware Slightly aware Moderately aware Fairly aware Extremely aware
9. Do you think increased use of digital transactions have been successful in Yes No Don’t know
reducing the problems associated with counterfeiting?
10. According to you what step should be taken to reduce problems of counterfeiting?
Increasing awareness through Advertisements on Television and Print Media
Strict action on fraudsters
Increasing awareness through use of Social Media
Regular Demonetisation

Remarks / Suggestions:

Page | 112