Fear of Counterfeits Stops RBI From Issuing High Value Notes

Raghuram Rajan said it is difficult to have currency notes of bigger denominations due to fear of counterfeiting.

Published: 19th September 2015 12:50 AM  |   Last Updated: 19th September 2015 12:50 AM   |  A+A-


A cashier counts rupee currency notes inside a bank in Mumbai August 5, 2013. | Reuters


MUMBAI: Acknowledging that people's wallets are thickening as they are required to carry more notes for errands, RBI Governor Raghuram Rajan today said it is difficult to have currency notes of bigger denominations due to fear of counterfeiting.

"Given that we are in a somewhat difficult neighbourhood, there is some concern on the extent of forgery that will take place if we do too large value notes," he said addressing the fourth C K Prahlad Memorial Lecture here.

"If I have a Rs 10,000 note, the value from forging it and the incentive to do all the investment that is needed to do all the forging devices increases," he said, adding that counterfeiting a Rs 10 bill is the "foolest form of forging".

Rajan did not name any country while talking about the menace of fake currency, but investigating agencies suspect most of the counterfeit notes originate from Pakistan.

The RBI chief said he has seen some "incredibly good" fakes of Rs 500 notes, but added there are a slew of security features which keep getting added.

"There have been arguments that we now carry very thick wallets because we need very many notes to make ordinary payments," he said.

The real solution to this problem lies in doing transactions electronically through means like mobile payments, Rajan suggested.

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