Counterfeit notes detected of Rs 2,000 denomination jumped in 2023-24 to 26,035 pieces in 2023-24 from 9,806 pieces a year ago as the Reserve Bank of India (RBI) started to withdraw these currency notes.

“On account of the ongoing withdrawal of Rs 2,000 banknotes from circulation and processing of these notes in large numbers, counterfeit notes detected in this denomination increased during the year,” the RBI said in its annual report for FY24.

Overall, the number of counterfeit notes detected in FY24 was lower than the previous year. The counterfeit for Rs 500 notes declined to 85,711 pieces in FY24 from 91,110 a year earlier. 

The RBI’s annual report also said that the share of Rs 500 denomination notes in India’s overall currency has jumped to 86.5% at the end of March 2024 versus 77.1% in the year-ago period. 

The central bank annual report attributed the surge primarily to the withdrawal of the Rs 2,000 denomination notes announced in May 2023. Share of this denomination has reduced to 0.2% from 10.8% in the year-ago period.

Volume-wise, the Rs 500 denomination was the highest at 5.16 lakh notes while Rs 10 denomination came a distant second at 2.49 lakh as of 31 March 2024, as per data shared in the annual report.

The value and volume of bank notes in circulation increased 3.9% and 7.8%, respectively, in FY24 as compared with an increase of 7.8% and 4.4%, respectively, during the previous fiscal year, it said.

The growth in the number of bank notes in circulation in value terms is among the lowest in recent years.

On the Rs 2,000 note withdrawal, it said about 89% of notes under the denomination introduced following demonetisation in 2016 had been around for over four years and were due for replacement, and were not commonly used for transactions.

On the recently launched central bank digital currency (CBDC) or e-rupee pilot, the annual report pegged the overall outstanding value at Rs 234.12 crore as against Rs 16.39 crore in March 2023.

Over Rs 164 crore, or 70% of the e-rupee, is in the Rs 500 denomination, while Rs 200 denomination comes second at Rs 32 crore, or 13.7%.

As of March 31, 97.7% of the Rs 3.56 lakh crore in outstanding Rs 2,000 denomination notes were returned by the public, the annual report said.

In FY24, the RBI spent Rs 5,101 crore on security printing as against Rs 4,682 crore in the year-ago period.

The RBI annual report said it also carried out a survey on currency usage among the public, where over 22,000 respondents across the country indicated that cash is 'prevalent' even though digital modes of payments were gaining traction.

The central bank also undertook campaigns to dispel misinformation about coins, the annual report said, adding that it is actively taking forward the process of introduction of new/upgraded security features for banknotes.