Counterfeit ₹500 notes increased by 14% in FY23: RBI report

Counterfeit ₹500 notes increased by 14% in FY23: RBI report

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Counterfeit banknotes worth ₹500 detected in the banking system increased by 14.4% in FY23, while those worth ₹20 saw an increase of 8.4 %, the Reserve Bank of India said in its annual report for 2022-23.

Of the total counterfeits detected, 4.6% were detected at the RBI and 95.4% at other banks.

Counterfeit ₹10 notes decreased by 11.6%, ₹100 by 14.7% and ₹2,000 by 27.9%.

In terms of value, the share of ₹500 and ₹2,000 banknotes increased to 87.9% of the total value of banknotes in circulation as of March 31, from 87.1% a year ago. In terms of volume, ₹500 notes had the highest share at 37.9%, followed by ₹10 notes at 19.2%.

Disposal of soiled banknotes increased by 22.1% to 2,293 crore coins in the year from 1,878 crore coins in FY22. securities were ₹4,683 crore from ₹4,985 crore in the previous year.

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System fraud

RBI said that while private banks reported the maximum number of frauds in FY23, public sector banks contributed more to the amount of fraud.

In terms of numbers, fraud in digital payments, including cards and internet, was highest, while in terms of value, fraud was highest in loan wallets.

“Small value card/internet fraud contributed the most to the number of frauds reported by private sector banks, fraud in public sector banks was primarily in the loan portfolio,” the report said.

Fraud reports have increased in recent years due to education by the RBI, banks and payment system operators on fraud reporting and alert mechanisms, industry players said.

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Overall, the total number of frauds reported in FY23 fell 49% year over year, prior to which fraud was down 55% in FY22.

RBI said there was always a significant lag between when a fraud first appeared and when it was detected. As a result, fraud that occurred in prior years accounted for 95% of the total fraud value in FY23 and 94% in FY22.

“The maximum number of frauds has been in digital transactions through various payment methods and channels. The preference for the Internet for large transaction volumes continues to grow, but some online payments do not meet security standards, which presents potential risks for customers,” said Rahul Jain, CFO of NTT DATA Payment Services India.

Additionally, digital payment methods are more susceptible to being targeted by fraudsters through phishing and vishing methods, while ATMs are more prone to skimming and other malicious activities, a- he added.

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