The RBI said 95% of counterfeit notes were detected by commercial banks and the remaining by itself.
The counterfeit notes intercepted by the banking system went up by 38,480 pieces to 6,32,926 pieces in 2015-16.
The RBI said 95% of counterfeit notes were detected by commercial banks and the remaining by itself.
Denominations of Rs 100 and Rs 1,000 had the largest amount of fake notes. So, one needs to watch out while handling the currency notes of these denominations.
To tackle the menace of fake notes, the RBI in collaboration with the central government initiated the process of introducing new series of banknotes with more sophisticated security features having higher levels of resistance to counterfeiting.
Central banks worldwide have been adopting a standardised practice of periodic up-gradation of security features of banknotes to stay ahead of counterfeiters. While in India, the last such up-gradation was done in 2005 with a new 2005 series of banknotes, certain new features such as bleed lines and exploding numbers were introduced during 2015-16.
"The process of procurement of new security features is presently underway while banknotes with new designs are also proposed to be introduced," RBI said in its annual report.
Despite the efforts of the banks and RBI to convert physical cash to electronic cash, the currency in circulation continued to climb. By end-March, the value of banknotes in circulation was Rs 16,415 billion, showing an increase of 14.9% as against 11.4% in 2014-15. The volume of banknotes increased by 8% as against 8.1% in 2014-15. In value terms, Rs 500 and Rs 1,000 banknotes together accounted for 86.4% of the total value of banknotes in circulation; by volume, Rs10 and Rs 100 banknotes constituted 53% of the total banknotes in circulation.
Currency management being its one of the important functions, the central bank also tries to implement a clean note policy. During 2015-16, 16.4 billion pieces of soiled notes were disposed of as against a target of 17.1 billion pieces. To encourage clean notes, banks have been asked by RBI to exchange soiled or torn notes of the public up to Rs 5,000 across the counter without charging a fee.
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