Counterfiet Notes


Counterfeiting is the oldest technique used by fraudsters to cheat unsuspecting individuals of their money. Here, the fraudster may handover an imitation currency in exchange for real bank notes under various pretexts like making change or offering help.

Counterfeit money is currency produced without the legal sanction of the State or government, usually in a deliberate attempt to imitate that currency and so as to deceive its recipient. Using counterfeit money is a fraud and a legal offence.

These currencies are cleverly made in relatably small amounts and dispersed in circulation by individuals, so as to get value of what real money can obtain.

The Counterfeit Notes can be impounded by-

  • All Banks
  • All Treasuries and Sub-Treasuries.
  • Issue Offices of Reserve Bank of India.


Notes determined as counterfeit shall be stamped as “COUNTERFEIT NOTE” and impounded in the prescribed format . Each such impounded note shall be recorded under authentication, in a separate register

The bank will impound the counterfeit note in the presence of the tenderer. The bank will also issue an acknowledgement to the tenderer. The receipt is authenticated by the cashier as well as by the tenderer. The acknowledgement is issued even in cases where the tenderer is unwilling to countersign it. The bank will thereafter forward the impounded note to the local police authorities for further necessary action.


Reserve Bank is making efforts to address the problem in the following ways:

  • By periodically improving the security features of Indian banknotes so that the counterfeiters find it difficult to copy.
  • By ensuring that the banks have robust systems in place which will enable them to identify and detect forged notes immediately on their entry into the banking system.
  • By raising public awareness on genuine Indian currency notes.
  • By training of cash handlers on detection of forged notes.
  • By improving co-ordination between the banks and law enforcement agencies.


Some of the ill effects of counterfeit notes on the society are –

  1. Increase in prices (inflation) due to more money getting circulated in the economy – an unauthorized artificial increase in the money supply.
  2. A decrease in the acceptability (satisfactoriness) of money – payees may demand electronic transfers of real money or payment in another currency.

Thus, Printing and/ or circulation of forged Indian Currency Notes is an offence under Sections 489A to 489E of the Indian Penal Code. Therefore, while receiving banknotes, it is important to check the genuineness of the notes before accepting them.


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