India is the largest producer and consumer of currency notes, next only to China. Currency continues to be the dominant means of payment with banknotes in circulation (in value terms) placed at Rs 14.3 trillion (1 trillion is 1 lakh crore) by March-end.
Fake notes are on the rise in India. In fiscal 2014-15, counterfeit notes in circulation rose 22% to 5,94,446 pieces, according to the Reserve Bank of India's annual report.
These are counterfeit notes that were detected in the banking system. While 95.6% of these notes were detected by commercial banks, 4.4% were detected at RBI offices. The number of counterfeit notes detected increased for all denominations, except for Rs 2 and Rs 5, which are almost out of circulation, being replaced by metal coins.
India is the largest producer and consumer of currency notes, next only to China. Currency continues to be the dominant means of payment with banknotes in circulation (in value terms) placed at Rs 14.3 trillion (1 trillion is 1 lakh crore) by March-end.
Despite the strong push for electronic payments, the value of banknotes in circulation increased by 11.4% to Rs 14,28,900 crore as at end-March 2015 over the previous year. Further, the volume of banknotes in circulation increased by 8.1% to 8,360 crore pieces over the same period.
Notes of denominations of Rs 500 and Rs 1,000 together accounted for approximately 85% of the total value of banknotes in circulation as at end March 2015. Notes of Rs 10 and Rs 100 together accounted for 54% of the volume as at end March 2015.
Total expenditure incurred on security printing stood at Rs37.6 billion during 2014-15 (July–June) as compared to Rs 32.1 billion during 2013-14. The increase was mainly on account of increased supply of banknotes by 13.1% over the previous year.
During 2014-15, around 1,510 crore pieces of soiled banknotes were disposed of as against a target of around 1,710 crore pieces and 1,420 crore pieces disposed during 2013-14.
Bharatiya Reserve Bank Note Mudran Pvt Ltd is a wholly owned subsidiary of Reserve Bank of India, which manages two presses -- one in Mysore in Karnataka and the other in Salboni in West Bengal. This press produces 60% of the annual requirement of banknotes and had supplied 15,515.88 million banknotes to the RBI as at end-March, 2015.
RBI is in the process of withdrawing the pre-2005 series of banknotes in phases. Though a majority of these notes have been withdrawn from circulation through bank branches, it was decided to extend the date up to December 31, 2015, to ensure the withdrawal of the remaining pre-2005 old design banknotes with the least inconvenience to the public.
During 2014-15, the goals set for the RBI included field trial of plastic banknotes, exploring alternatives for extending the life of banknotes, introduction of new series of banknotes to leverage the latest innovations of currency note printing technology to stay ahead of counterfeiters, redesigning coins to make them user friendly and long-lasting.
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