Detection of counterfeit currency notes in India’s banking system rose 5.7 per cent in 2025-26, driven largely by a sharp increase in fake ₹500 notes, according to the latest annual report released by the Reserve Bank of India. 

The total number of counterfeit notes detected during the financial year stood at 2,29,746 pieces, up from 2,17,396 pieces in 2024-25. 

Among all denominations, fake ₹500 notes remained the most frequently detected. The number surged 20.5 per cent to 1,41,907 pieces in 2025-26, compared with 1,17,722 pieces in the previous year. The denomination accounted for the bulk of counterfeit detections across the banking system. 

Counterfeit ₹20 notes recorded one of the steepest percentage increases, climbing 47.4 per cent to 373 pieces from 253 pieces a year earlier. 

At the same time, detections of fake notes in several other denominations declined. Counterfeit ₹200 notes fell to 30,591 pieces from 32,660 in 2024-25, while fake ₹100 notes dropped to 45,621 from 51,069. Detection of counterfeit ₹50 notes also declined to 10,274 pieces from 12,015. 

The latest trend comes nearly a decade after India’s 2016 demonetisation exercise, when the government withdrew old ₹500 and ₹1,000 currency notes in a move aimed partly at curbing black money and counterfeit currency circulation.

Following the move, the RBI introduced redesigned ₹500 notes and a new ₹2,000 denomination, while later rolling out upgraded ₹100 notes with enhanced security features. The redesigned banknotes were meant to make counterfeiting more difficult through new colour schemes, motifs, micro-lettering, see-through registers, latent images and advanced security threads. 

However, the RBI data suggests counterfeiters continue to target high-circulation denominations, especially the newer ₹500 notes that became the backbone of cash transactions after demonetisation and the subsequent phased withdrawal of ₹2,000 notes. 

Fake ₹2,000 notes continued to decline sharply following the withdrawal of the denomination from circulation. Detection fell to 824 pieces in 2025-26, down from 3,508 pieces in the previous financial year. 

The RBI said that 97.6 per cent of all counterfeit notes — amounting to 2,24,334 pieces — were detected by other banks, while the central bank itself detected 5,412 pieces, accounting for 2.4 per cent of the total. The figures do not include counterfeit notes seized directly by police or enforcement agencies. 

The annual report also highlighted a sharp decline in disposal of soiled banknotes. A total of 1.72 lakh pieces of soiled notes were disposed of in 2025-26, compared with 2.38 lakh pieces in the previous year, marking a decline of about 28.6 per cent. 

Among denominations, disposal of ₹500 notes remained the highest at 59.8 lakh pieces during the year, though this was lower than 89.8 lakh pieces disposed of in 2024-25. Disposal of ₹20 notes fell to 9.8 lakh pieces from 16.5 lakh pieces, while disposal of ₹100 notes remained largely steady at 58.1 lakh pieces. 

Published on: May 29, 2026 6:54 PM IST