23% rise in fake notes in India's private banks

A steep jump of 23 per cent in the number of counterfeit notes detected by private-sector banks in 2011-12 has put the government on an extra alert mode.

The private banks in the country, in a report submitted to the Reserve Bank of India (RBI), has stated that it had detected 4,62,865 counterfeit notes in 2011-12 as against 376,460 found in 2010-11.

The counterfeit notes detected by these banks during 2009-10 stood at 334,948.

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The data presented in Parliament by the finance ministry indicates that 23 per cent increase in the counterfeit notes detected by private banks during the previous financial year is alarmingly higher than the 12 per cent increase witnessed in 2010-11.

This trend has led to a series of measures both from RBI and the government to combat with the situation.

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Plastic notes

Residents of Jaipur, Shimla, Bhubaneshwar, Mysore and Cochin will have a rare privilege soon. Plastic notes in the country will be introduced by the Reserve Bank of India (RBI) in these five cities.

The government, in consultation with RBI has decided to introduce Rs 10 notes in polymer/plastic on a field trial basis at these five places.

The selection of location, interestingly, has been done keeping in view the varied geographical location and climatic conditions, according to the finance ministry.

The decision has been taken with a view to elongate the life of bank notes, in particular the lower denominations.

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Further, RBI, home ministry, security and intelligence agencies of the Centre and the states and the Central Bureau of Investigation (CBI), are working in tandem to thwart the illegal activities related to fake Indian currency notes (FICN).

A special FICN coordination group has also been formed by the home ministry to share intelligence information amongst the different security agencies of Centre and states to counter circulation of fake currency.

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The government has also constituted a terror funding and fake currency cell in National Investigation Agency (NIA) to focus on investigation of terror funding and fake currency cases.

With this, India and the United States are cooperating in combating counterfeit currency within the framework of the Indo-US homeland security dialogue launched in May 2011.

The US has invited a team of Indian officials to visit the country's facilities related to system of detection of counterfeit currency and storage of data and has offered technical assistance to help India develop its database on counterfeit currency.