RBI Annual Report Reveals 20% Surge in Fake ₹500 Notes, Making Up Nearly 62% of Counterfeit Currency

In the fiscal year 2025-26, the Indian banking system recorded a significant rise in counterfeit ₹500 notes, as highlighted in the Reserve Bank of India's (RBI) annual report. 

Surge in ₹500 Counterfeits Detected 

The number of counterfeit ₹500 notes detected increased by 20.5% to 1,41,907 pieces, emphasising its popularity among counterfeiters.  

The ₹500 note accounts for 61.8% of all counterfeit detections in the fiscal year 2025-26, reflecting its vast circulation and appeal.  

In contrast, counterfeit ₹2,000 notes dropped to just 824 pieces, a 76.5% decrease year-on-year, aligned with the RBI's initiative to phase out this denomination. 

Improved Detection in Commercial Banks 

Commercial banks have significantly upgraded their ability to identify fake currencies. Detections by these banks amounted to 2,24,334 pieces, representing 97.6% of the total fake notes found.  

This improvement indicates fewer counterfeit notes reaching the RBI and demonstrates strengthened frontline detection capabilities across the banking network. 

Overview of Other Denominations 

While the focus is primarily on ₹500 notes, other lower denominations, including ₹10, ₹50, ₹100, and ₹200, saw a decline in counterfeit detections during the same period. However, fake ₹20 notes did see an uptick in their numbers. 

RBI's Measures on Currency Security 

The increase in counterfeit ₹500 notes has prompted the RBI to further enhance security features on Indian banknotes.  

As part of its Utkarsh 2029 programme, the RBI plans to strengthen banknote integrity and improve the durability of substrates used in currency notes. 

Read More: India’s Credit Card Spends Rise 7% to ₹1.97 Trillion in April 2026: RBI Data! 

Conclusion 

The widespread circulation of ₹500 notes makes them an attractive target for counterfeiters, leading to a noticeable increase in fake detections. Although commercial banks have improved their detection systems, ongoing efforts by the RBI to introduce enhanced security features remain crucial. 

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