A discussion on fake Indian currency notes (FICN) has been doing the rounds, especially since demonetisation. While the quantum of fake notes in circulation remains difficult to ascertain, data on the detection of fake notes by the Reserve Bank of India (RBI) throws some light on the possible range. The RBI put the figures of fake notes in FY17 at Rs 43.47 crore in its annual report released on August 30. This amount includes all denominations.
On the other hand, an analysis of the data released by the RBI on the detection rate of fake notes of Rs 500 and Rs 1,000 denomination scrapped notes in a nationwide sample survey, also published in the annual report, suggests it was Rs 18.97 crore between November 8, 2016 and March 31, 2017. The third data point comes from a query answered in the Lok Sabha by the Minister of State for Finance on February 3, 2017, which put the value of fake notes detected after demonetisation at Rs 19.53 crore. This data point is for banned Rs 500 and Rs 1,000 notes.
Apart from these, the National Crime Records Bureau detected Rs 11.23 crore worth of fake currency notes across all denominations after demonetisation till July 14, 2017, according to a Parliament query.
FICN estimates from RBI sample survey
FICN estimates from RBI sample survey
The RBI launched a nationwide sample survey after November 8, 2016, to ‘estimate the density’ of FICNs detected during the counting and verification processes. The survey was done at the currency chest level, among the 4,009 chests present in 19 issues offices in India. The survey found the FICN density to be 19.1 notes per million notes of Rs 1,000, higher than 12.4 per million; the rate of detection at the RBI. For the old Rs 500 note, too, the rate was found to be higher at 7.1 fake notes per million.
Using the data on unreturned number of scrapped denomination notes, the number of Rs 1,000 and Rs 500 notes available with RBI as on March 31, 2017, was arrived at.
Using the rate of detection, the number, and subsequently the value, of fake Rs 1,000 and Rs 500 notes possibly existing in RBI currency chests was estimated.
FICN according to Parliament data
Data accessed from the Parliament query answered on February 3, 2017, show the actual number and value of fake notes detected in the RBI and the banking system after demonetisation was quite close to the estimate arrived from the sample survey.
The total face value of fake currency detected post demonetisation according to the RBI was Rs 19.53 crore, while that estimated from the sample survey is Rs 18.97 crore.