Lok Sabha Question No. 3564 (UNSTARRED), answered on 2022-08-08
Subject: Circulation of Fake Currency
Ministry: FINANCE
Asked by: Sanjeev Kumar Singari

## GOVERNMENT OF INDIA MINISTRY OF FINANCE LOK SABHA UNSTARRED QUESTION NO. 3564

## DEPARTMENT OF ECONOMIC AFFAIRS TO BE ANSWERED ON 08.08.2022

## Circulation of Fake Currency

3564. DR. SANJEEV KUMAR SINGARI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the value of fake Indian currency notes has gone up by leaps and bounds since demonetisation in 2016 and if so, the details thereof;
- (b) whether the value of fake currency seized has gone up from Rs. 28.10 crores in 2017 to Rs. 92.17 crores in 2020;
- (c) if so, whether this indicates that circulation of fake currency in the country is going up;
- (d) if so, the reasons therefor along with the efforts being made by the Government to contain fake currency circulation and the details of fake currency seized in 2021; and
- (e) the justification of the Government that the number of counterfeit bank notes has come down from Rs. 7.62 lakh in 2016-17 to Rs. 2.08 lakh in 2020-21?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a)  to  (c)  :  As  per  RBI,  the  value  of  counterfeit  notes  detected  in  the  banking  system  has reduced from ₹43.47 crores in 2016-17 to ₹8.26 crores in 2021-22, as detailed below:

| Year         | 2016-17      | 2017-18      | 2018-19     | 2019-20     | 2020-21     | 2021-22     |
|--------------|--------------|--------------|-------------|-------------|-------------|-------------|
| Value (in ₹) | 43,46,75,710 | 23,34,91,965 | 8,23,59,960 | 7,48,03,650 | 5,45,00,125 | 8,25,93,565 |

As per National Crime Records Bureau (NCRB) data, the value of fake currency seized in the year 2017 and 2020 was ₹ 28.10 crores and ₹ 92.18 crores respectively.

As per the report of the agencies, there have been instances where it has been found that the fake  currency  has  been  smuggled  from  the  neighbouring  countries.  While  notes  seized  by different law enforcement agencies have gone up, there is a discernable trend of reduction in the number of counterfeit notes detected in the banking system.

(d): To contain the circulation of Fake Indian Currency Notes (FICN), Government of India had,  inter  alia,  enacted  the  Unlawful  Activities  (Prevention)  Act,  1967,  formed  National Investigation Agency (NIA) which is the nodal agency for investigation of high-quality FICN in India, constituted an FICN Coordination Group (FCORD) to share intelligence/information among the security agencies of the States/Centre and constituted a Terror Funding and Fake Currency (TFFC) Cell in the NIA to conduct focused investigation of terror funding and fake currency cases.

Further, a Joint Task Force is functioning between India and Bangladesh for building trust and  cooperation  for  exchange  of  information  and  analysis  of  smugglers  of  FICN.  A Memorandum of Understanding (MoU) has been signed between Indian and Bangladesh to prevent and counter smuggling and circulation of fake currency notes.

Government  also  conducts  capacity  building  programmes  for  various  law  enforcement agencies at Centre/State level. In addition, training programmes are conducted for the police officials of Nepal and Bangladesh to sensitise them about smuggling/counterfeiting of Indian currency.

Reserve Bank of India had issued banknotes in all denominations in Mahatma Gandhi Series - 2005, with a new exploding numbering pattern in 2015. With these visible security features the  general  public  can  easily  distinguish  a  counterfeit  note  from  a  genuine  one.  Details  of security features of these notes are displayed on the RBI website for the general public.

RBI issues various instructions to banks on measures to safeguard against forged notes. RBI regularly conducts training programmes on detection of counterfeit notes for employees/officers of banks and other organisations handling large amount of cash. RBI has issued a Master Circular on detection and reporting of counterfeit notes, updated as on April 01,  2022  which  is  available  in  the  public  domain  for  wider  dissemination  of  systems  and procedure to be followed on detection of counterfeit notes.

The  data  from  the  published  reports  of  NCRB  on  the  seizure  of  fake  currency  notes  are available till the year 2020.

(e): The number of counterfeit banknotes has come down from ₹7.62 lakhs pieces in 2016-17 to ₹2.09 lakhs pieces in 2020-21 post decision of the Government of India to cancel the Legal Tender Status of ₹1000 and ₹500 denomination currency notes on 8th November 2016. The decision  of  demonetisation  had  several  objectives  including  curbing  of  circulation  of  Fake Indian Currency Notes (FICN).