The circulation of counterfeit Indian banknotes (FICN) in the country continues to pose a challenge even after demonetarization in 2016, the main objective of which was to eradicate counterfeiting of banknotes.

According to the National Crime Control Bureau (NCRB) report, FICN, which has a face value of Rs 245.33 crore, has been seized by law enforcement agencies across the country since 2016 – the year the center demonstrated Rs 1,000 and Rs 500 banknotes.

The highest amount of FICN with a face value of Rs 92.17 crore was seized in 2020 while the lowest with a face value of Rs 15.92 crore was seized in 2016.

In 2021, FICN was seized in the country in face value of Rs.20.39 crore, 2019 Rs.34.79 crore, 2018 Rs.26.35 crore and 2017 Rs.55.71 crore, according to the NCRB data showed.

According to the annual report of the RBI published in May 2022, the number of counterfeit banknotes with a nominal value of 500 detected by the banking system more than doubled in the financial year 2021/22 compared to the previous year to 79,669 pieces.

The number of counterfeit 2,000 denomination banknotes detected in the system was 13,604 in 2021-22, a 54.6 percent increase from the previous fiscal year.

After a decline in 2020-21, the total number of FICNs of all denominations recognized in the banking sector increased to 2,30,971 from 2,08,625 in the previous financial year.

In 2019-20 the number of FICN was 2,96,695 pieces.

“Compared to last year, there was an increase of 16.4 percent, 16.5 percent, 11.7 percent, 101.9 percent and 54.6 percent in detected counterfeit notes in the denominations of Rs 10, Rs 20, 200 Rs, Rs 500 (new design) and Rs 2,000 respectively,” according to the RBI’s annual report for 2021-22.

The detected counterfeit notes of Rs 50 and Rs 100 fell by 28.7 percent and 16.7 percent respectively.

In 2021-22, of the total FICN detected in the banking sector, 6.9 percent were detected at the Reserve Bank and 93.1 percent at other banks, the RBI report said.

One of the main goals of the demonetization of the then-dominant Rs 500 and Rs 1,000 notes in 2016 was to curb the circulation of counterfeit notes.

On 8 November 2016 Prime Minister Narendra Modi had announced that Rs 500 and Rs 1,000 notes would no longer be legal tender in India as of midnight. Modi had said the decision was made to “fight corruption, black money and terrorism”.

The Rs 2,000 notes and the Rs 500 notes with a new design were introduced after demonetization.