RBI Issues New Update on ₹500 Counterfeit Notes: Sharp Rise Detected After ₹2000 Note Withdrawal

The Reserve Bank of India (RBI) and the Finance Ministry have issued an important update regarding the growing circulation of fake ₹500 notes in the country. After the withdrawal of ₹2000 currency notes, counterfeiters appear to have shifted their focus to ₹500 notes — which now account for the highest number of fake notes in India’s economy, according to official data.

Sharp Spike in Fake ₹500 Notes

As per the Department of Economic Affairs, the number of counterfeit ₹500 notes from the Mahatma Gandhi series has seen a steep jump in the financial year 2024–25, reaching 1,17,722 pieces.

• In FY 2022–23, 91,110 fake notes were seized.

• In FY 2023–24, the number was slightly lower at 85,711.

• But in FY 2024–25, it rose sharply to 1,17,722, marking a significant 37% increase from the previous year.

Officials attribute this rise to counterfeiters focusing on the ₹500 denomination after the ₹2000 notes were withdrawn from circulation.

Decline in Fake ₹2000 Notes After Withdrawal

The number of fake ₹2000 notes surged when the denomination was first withdrawn but later declined dramatically:

• FY 2022–23: 9,806 fake notes detected

• FY 2023–24: 26,035 fake notes detected

• FY 2024–25: Only 3,508 fake notes detected

This sharp fall confirms that counterfeiters have now redirected their efforts toward ₹500 notes, which remain the most widely used currency denomination in India.

Mixed Trends in Smaller Denominations

While ₹500 notes dominate the fake currency trend, other denominations have shown varying patterns:

• ₹100 notes: Declined from 1,10,736 (FY 2020–21) to 51,069 (FY 2024–25).

• ₹200 notes: Increased from 24,245 to 32,660 during the same period.

Overall, across all denominations, 2,17,396 fake notes were detected in FY 2024–25 — a slight decrease compared to the previous year. However, the new series of ₹500 notes now constitutes the majority of counterfeit currency in circulation.

Interestingly, the old Mahatma Gandhi series ₹500 notes have almost vanished, with just five counterfeit pieces detected during FY 2024–25 — showing that they are nearly out of use.

RBI and Government Tighten Security Measures

In response to the increasing threat, the Finance Ministry stated that it is working closely with the RBI to continuously review and enhance the security features of Indian banknotes.

Under Section 25 of the Reserve Bank of India Act, 1934, the RBI is authorized to redesign notes and incorporate new security measures to stay ahead of counterfeiters.

The Ministry further emphasized that updating design elements — such as watermarks, micro-text, color-shifting ink, and security threads — is a continuous process to make currency duplication extremely difficult.

Why the ₹500 Note Is a Prime Target

Experts suggest that ₹500 has become the most counterfeited denomination because it strikes a balance between value and usability — making it easier for counterfeiters to circulate fake notes without immediate detection. The denomination is widely used for both retail transactions and bulk payments, increasing the chance of such notes entering the market unnoticed.

Banks and citizens are being urged to check security features carefully when accepting cash and to immediately report any suspicious notes to the nearest police station or bank branch.

What This Means for Consumers

With the growing sophistication of fake note production, the RBI has advised the public to stay alert. The central bank has also launched awareness campaigns through its “Know Your Currency” initiative, explaining how to identify genuine ₹500 notes through visible and tactile features.

In Summary:
The recent RBI and Finance Ministry data reveal a clear trend — fake ₹500 notes are on the rise after the withdrawal of ₹2000 bills. The government is ramping up its efforts to counter this with advanced currency security designs and stricter monitoring. For now, citizens are advised to stay vigilant and verify every note, as the fight against counterfeit currency continues.