Why is Rs 500 note now dominating India’s counterfeit Market?

The number of fake Rs 500 notes in India has risen sharply in 2024–25, a year after the Rs 2,000 note was taken out of circulation. According to data from the Ministry of Finance’s Department of Economic Affairs, detections of counterfeit Rs 500 notes from the new Mahatma Gandhi series climbed to 1,17,722 pieces in 2024–25, compared with 85,711 in 2023–24 and 91,110 in 2022–23. The Rs 500 denomination has now become the most counterfeited note in the country.

What happened after the Rs 2,000 note was withdrawn?

The increase in fake Rs 500 notes has come soon after a sharp drop in counterfeit Rs 2,000 notes, which had risen briefly during the withdrawal period.

Counterfeit Rs 2,000 notes went up from 9,806 in 2022–23 to 26,035 in 2023–24, before falling to 3,508 in 2024–25. The pattern suggests that counterfeiters have shifted their focus from the discontinued Rs 2,000 to the more commonly used Rs 500 note.

The lower-value notes showed mixed trends over the years. Fake Rs 100 notes dropped from 1,10,736 in 2020–21 to 51,069 in 2024–25. However, fake Rs 200 notes rose from 24,245 to 32,660 during the same period.

What is the overall situation with fake currency?

Across all denominations, total detections of counterfeit notes fell slightly from 2,30,971 in 2021–22 to 2,17,396 in 2024–25.

However, the Rs 500 note of the new Mahatma Gandhi series now dominates the fake currency landscape. The older Mahatma Gandhi series Rs 500 note has nearly disappeared, with only five fake pieces found in 2024–25.

How is the government responding?

The Ministry of Finance stated that, in consultation with the Reserve Bank of India, it regularly reviews the security features of banknotes under Section 25 of the RBI Act, 1934.

The ministry also said that introducing new designs and security improvements is an ongoing process to stay ahead of counterfeiters.