Fake currency notes of Rs 500 & Rs 2000: The Finance Ministry has reported an increase in fake notes of Rs 500 and Rs 2000 in the year 2023-24, which were caught in the banking system during the demonetization of Rs 2000 notes. Union Minister of State for Finance Pankaj Chaudhary shared this information in a written reply in the Lok Sabha, citing data from the Reserve Bank of India. According to the RBI, there has been an increase in fake Rs 2000 notes during 2023-24, as these notes were processed in large quantities during the phased withdrawal. Finance Ministry data shows that there has been a four-fold increase in fake Rs 500 notes since 2018 and a three-fold increase in fake Rs 2,000 notes since 2021.

The number of fake 500 rupee notes increased four times.

According to a Business Standard report, the number of counterfeit new Rs 500 notes detected has nearly quadrupled between 2018-19 and 2023-24. Meanwhile, data shared by the Finance Ministry showed that the detection of counterfeit Rs 2,000 notes has tripled since 2020-21. The Finance Ministry on Monday shared concerns about the rising circulation of counterfeit currency in the recent Lok Sabha session. The reply submitted by Minister of State for Finance Pankaj Choudhary highlighted the trends of counterfeit notes in recent years, especially in the denominations of Rs 500 and Rs 2,000.

Fake 500 rupee notes caught

The Rs 500 note has become the backbone of daily transactions, with its circulation witnessing a steady increase over the years. Data shared by the ministry showed that 21865 million pieces (mpcs) of counterfeit notes were detected in 2018-19. It reached a high of 91,110 mpc in 2022-23 and declined slightly to 85,711 mpc in 2023-24. This is significantly higher than the 21,865 mpc recorded in 2018-19. The number of fake 2000 rupee notes increased 3 times.

The data showed that the number of fake Rs 2,000 notes detected has tripled since 2020-21. The number of fake Rs 2,000 notes detected dropped from 21,847 in 2018-19 to 8,798 in 2020-21. 13604 MPCs were detected in the financial year 2021-22, which again dropped to 9,806 MPCs in 2022-23. The latest data for 2023-24 showed a significant increase to 26035, which is almost 3 times the notes detected in 2020-21 and a substantial increase compared to previous years.

The introduction and decline of the Rs 2,000 note

The Rs 2000 note was introduced as a high-value denomination to quickly replenish cash supply after thedemonetizationn of Rs 500 and Rs 1000 notes in 2016. Its initial purpose was to ease liquidity during cash shortages. The Rs 2000 note saw widespread circulation in the years immediately following its introduction. As of March 2018, Rs 2000 notes accounted for 37.3 percent of the total currency value in circulation, according to Reserve Bank of India ( RBI ) data.

2000 rupee notes out of circulation in 2023

In 2018-19, the RBI reduced the printing of Rs 2,000 notes citing low demand and concerns of its misuse for illegal activities. By March 2021, Rs 2000 notes accounted for only 17 ppercentof the total currency value. The RBI announced to phphasingut of Rs 2000 notes from circulation in May 2023. However, they will remain legal tender. Citizens were given time to exchange or deposit these notes in banks, with most of them being removed from the system. This phased withdrawal is in line with the RBI's strategy to focus on Rs 500 notes as the primary high-value denomination.

People still have 2000 rupee notes worth 6970 crores

According to data released by the RBI earlier this month, 98.04% of the Rs 2,000 banknotes, worth Rs 3.49 lakh crore, have returned to the banking system since the withdrawal was announced on May 19, 2023. The remaining Rs 2,000 notes worth Rs 6,970 crore are still in the possession of the public as of October 31, 2024.