Unfortunately, the issue of fake Indian currency is a huge problem that’s been growing in recent years. Counterfeiters are becoming so clever and the newest notes are made so well, it’s difficult to identify them.
Fake Indian Currency Note (FICN) is the official term for counterfeit notes in the Indian economy. Estimates vary as to how many fake notes are in circulation. A study completed by the National Investigation Agency in partnership with the Indian Statistical Institute (ISI) stated that the value is Indian rupees equivalent to $4 billion.
Fake notes are even dispensed from ATM machines at banks in India, particularly higher denomination notes.
The Indian government has been putting a lot of effort into addressing the issue of fake currency, including changing the design of notes to make them harder to copy and implementing a surprise overnight demonetization of existing 500 and 1,000 rupee notes.
On November 8, 2016, the Indian government declared that all existing 500 rupee and 1,000 rupee notes would cease to be legal tender from midnight. The 500 rupee notes have been replaced by new notes with a different design, and brand new 2,000 rupee notes have been introduced for the first time.
However, it didn’t reduce the problem of fake currency. Only three months after the newly minted 2,000 rupee note was introduced in India, multiple counterfeit copies of it were found and confiscated. There were even instances of fake notes being issued in the name of the “Children’s Bank of India” and dispensed from ATMs.
The Reserve Bank of India’s 2017-18 Annual Report, which was released in August 2018, also indicated that the new currency notes aren’t necessarily more secure or less prone to counterfeit. There was a 154 percent increase in the number of fake 50 rupee notes detected in 2017-18 compared to 2016-17. In addition, the number of detected fake 2,000 rupee notes grew by 2,710 percent, while fake 500 rupee notes jumped by 4,871 percent.
The Indian government believes that the notes are produced by foreign racketeers in Pakistan, on-demand from Pakistan’s military intelligence agency, the Inter-Services Intelligence (ISI). India’s National Investigation Agency found that fake Indian currency was used by Pakistani terrorists involved in the 2008 attack in Mumbai.
According to news reports, the main motive behind Pakistan’s printing of the fake notes is to destabilize the Indian economy. It’s a major issue for the Indian government, which aims to make the counterfeiting of Indian currency an offense under the country’s anti-terrorism law, the Unlawful Activities (Prevention) Act 1967.
In August 2018, the Indian government disclosed that from the date of demonetization up until June 30, 2018, nearly 43 percent of fake Indian currency seized was in Gujarat state. A further 15.8 percent was recovered from Uttar Pradesh and 14.4 percent in West Bengal. Significant amounts of fake currency were also found in border states including Mizoram, Jammu and Kashmir, Punjab, and Rajasthan. However, the problem is no longer restricted to border states. Counterfeit 2,000 rupee notes, which were said to look so genuine it would be hard for the average person to identify them as fake, were recently seized in most of the cities in the country.
Until now, although counterfeit INR had been identified as those had actually been manufactured by various crime rackets under the direct supervision of Pakistani ISI, but since 2018, Indian rupee notes are being directly manufactured in the security printing press in Pakistan. According to sources, it is almost impossible for anyone to detect those counterfeit currency notes, which are printed in the security printing presses. It said, ISI has a plan of pumping at least two billion counterfeit Indian rupees by 2019, most of which would be circulated by the members of jihadist outfits named Hizbul Mujahedin, Jamaatul Mujahedin Bangladesh (JMB) and Arakan Rohingya Salvation Army (ARSA).
Pakistan is believed to have numerous counterfeit currency networks operating out of Nepal, Bangladesh, and Thailand. Countries such as the United Arab Emirates, Qatar, Iran, Iraq, Sri Lanka, and Malaysia are also used as transit points. Majority of the stake of dealing in counterfeit INR is being handled by a sacked Bangladeshi military officer named Md. Shahid Uddin Khan, who maintains a huge network within the Indo-Bangladesh common borders for pumping counterfeit INR into India.