Money & Banking

Sharp rise in detection of `fake' ₹500 notes

PALAK SHAH Mumbai | Updated on October 21, 2019 Published on October 21, 2019

Overall more than 3.17 lakh pieces of fake currency notes discovered including the 2000s, 500s, 200s, 100s, 20s and 10s.

 

It is not just ₹2,000 fake notes, and even ₹500 currency counterfeit notes have been discovered in large numbers, data collected by Authentication Solution Providers Association (ASPA) from various sources show. ASPA is a two decade-old non-profit organisation that fights and creates awareness against the fake currency, counterfeiting of products across sectors involving pharma, food adulteration and even goods sold on e-commerce websites.

A right to information query had revealed recently that the Reserve Bank of India (RBI) had stopped printing ₹2,000 currency notes. Although RBI is yet to issue any detailed statement about it, there is a general belief that such a measure was taken due to the rise in fake ₹2,000 currency notes. Sources close to the policymaking in RBI suggest that it is unlikely that ₹2,000 notes would be flushed out by a ‘demonisation’ like move as it had proved to be highly disruptive. But RBI would consciously reduce ₹2,000 currency notes over the years. The fact that even ₹500 fake currency notes were in circulation is a matter of concern, as the RBI and regulatory agencies can only do search and seizure operations about this, a legal expert on currency matters said. Yet, other experts said that the number of fake notes discovered by RBI recently seems small to trigger a decision to stop printing any currency denomination.

Sharp rise in fake notes

ASPA says that detection of ₹500 fake currency notes increased by 121 per cent during the financial year 2019 as per data from RBI. The data shows that RBI discovered a total of more than ₹3.17 lakh fake notes. In this 21,865 currency pieces were fake ₹500 currency notes. The same for ₹2,000 stood at 21,847. Over 12,728 pieces of fake notes for ₹200 denominations and 221218 units of fake ₹100 currency notes were discovered during financial years 2019, as per RBI data. Fake currency notes of ₹10, 20, and 50 too were also found, data shows. Overall, fake currency worth more than ₹8.23 crore was discovered in India by RBI and other banks put together, data shows.

“Compared to the previous year, there was an increase of 20.2 per cent, 87.2 per cent and 57.3 per cent in counterfeit notes detected in the denominations of ₹10, ₹20 and ₹50, respectively. Counterfeit notes detected in the denomination of ₹100 declined by 7.5 per cent. In the denomination of ₹200, which was introduced in August 2017, 12,728 counterfeit notes were detected as against 79 during the previous year. Counterfeit notes in the denomination of ₹500 (new design notes), increased by 121.0 per cent, while in ₹2,000, it increased by 21.9 per cent during 2018-19,” RBI said in its datasheet.

Need to upgrade security features

Nakul Pasricha, President, ASPA said, "Considering the volume of banknotes that are currently being handled or likely to be handled in the future, there is a pressing need to adopt robust technology for upgrading security features and processes for currency management in the country. An ideal way to stay ahead of counterfeiters is to use a combination of physical and digital security features on all currency pieces."

Counterfeits in other industry

On counterfeiting in pharma industry ASPA says that according to them and independent study, the rate of substandard or spurious drugs in India will be around10 per cent in India of the total industry size.

ASPA says that in the auto industry, counterfeit penetration is between 30-36 percent in the auto component market.

“Perhaps, being on the conservative side, according to ACMA (automotive component manufacturers) it was 5 percent in 2016-17. The total size of the after market industry in India in 2018-19 was ₹67,491- crore, and even on the conservative side, it is causing more than ₹4000 crore every year,” ASPA said.

ASPA says that around 20 per cent of products sold on e-commerce websites, mainly perfumes and cosmetics are fake.

ASPA on adulterated food

"Cases of food adulteration have increased over the last three years, and the government is looking to private players for investment to augment its efforts in ensuring food safety. More than 23.4 per cent of the total samples analysed in 2016-17 were found adulterated, while 26.4 per cent of the samples were found contaminated in 2018-19, according to the latest data available with the Union Ministry of Health and Family Welfare. Uttar Pradesh remains the worst hit in food adulteration with 45 per cent (of the samples tested in the state), followed by Jharkhand (40 per cent), and Tamil Nadu (37 per cent). As many as 36 per cent (23,441) of the total of 65,028 adulterated samples detected in India in three years was found in Uttar Pradesh, according to a public laboratory testing report presented in the Lok Sabha last month by the health ministry."

On spurious liquor

More than 150 people die this year after consuming spurious liquor. One can understand the height of nuisance in this industry as in Uttar Pradesh alone more than 8,000 people were arrested for the business of illicit liquor. The government had seized 36.45 lakh litres of the illegal alcohol in the last five years. Even in Delhi, the Excise Department had seized approximately 3,65,391 bottles in FY 2018-19.

Published on October 21, 2019
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