The Rs 500 note has now become the dominant target for counterfeiters, accounting for 61.8% of all fake notes detected in the banking system in FY26, up from 54.2% in FY25 and 38.5% in FY24, a sharp and consistent rise that points to increasing sophistication in the production of fake high-value currency. Fake Rs 20 notes also saw a significant jump of 47.4% to 373 pieces, though the absolute numbers remain small.
The surge in Rs 500 fakes contrasts sharply with the near-extinction of fake Rs 2,000 notes, detection of which collapsed 76.5% to just 824 pieces in FY26 from 3,508 in FY25 and 26,035 in FY24, consistent with the RBI’s withdrawal of Rs 2,000 notes from circulation. Counterfeit notes in denominations of Rs 10, Rs 50, Rs 100 and Rs 200 all declined during the year.
A notable trend in the data is the sharp decline in counterfeit detection at the RBI itself — falling to just 5,412 pieces or 2.4% of total detections in FY26, down from 10,255 pieces (4.7%) in FY25 and 17,613 pieces (7.9%) in FY24. Correspondingly, detection at commercial banks rose to 2,24,334 pieces or 97.6% of the total — suggesting that the banking system’s frontline detection capabilities are improving, with fewer fake notes making it all the way to the central bank before being caught.
The data comes as the RBI prepares to introduce new and upgraded security features on Indian banknotes as part of its currency management agenda for 2026-27, with a specific focus on strengthening banknote integrity and improving substrate durability under its Utkarsh 2029 programme.
The Rs 500 note’s dominance in counterfeit detection is a direct consequence of its overwhelming presence in circulation — the denomination accounts for 85.5% of the total value of currency in circulation and 41.2% of volume, making it the most attractive target for counterfeiters. With 705.48 crore Rs 500 notes outstanding, even a marginal improvement in fake note technology can translate into significant detection numbers.