From Rs 500 to Rs 10: ISI shifts fake currency strategy, floods India with counterfeit low-value notes

Indian security agencies have detected a shift in counterfeit currency operations, with fake lower denomination notes allegedly replacing earlier Rs 500 counterfeits. Officials warn of possible attempts by criminal networks to circulate Rs 10, Rs 20 and Rs 50 fake notes

New Delhi: Criminal syndicates, including the network run by Dawood Ibrahim, have long been involved in circulating fake Indian currency notes. Backed by Pakistan’s Inter-Services Intelligence (ISI), these networks have treated counterfeit currency as one of their most profitable operations for years.

Indian security agencies have now detected a significant shift in the way counterfeit currency is being pushed into the country. Investigators say the circulation of fake Rs 500 notes has declined sharply, pointing to a change in the strategy adopted by the counterfeit currency network.

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Earlier, the network primarily focused on counterfeiting Rs 200 and Rs 500 notes. Agencies have now found that the emphasis has shifted to lower denominations, with fake Rs 10, Rs 20 and Rs 50 notes being circulated in large numbers. The circulation of counterfeit currency not only finances these criminal syndicates but also poses a threat to India’s economic stability.

Officials say this is one of the key reasons why Pakistan’s Inter-Services Intelligence (ISI) has continued to facilitate the trade, much of which is allegedly orchestrated through the Dawood Ibrahim syndicate. An Intelligence Bureau official said there are credible intelligence inputs indicating that Pakistan’s ISI is planning to flood the market with counterfeit currency in lower denominations.

According to the official, the strategy is to circulate fake Rs 10, Rs 20 and Rs 50 notes in much larger volumes than before. “There are multiple reasons behind this newfound strategy. These elements are aware that people are extremely cautious about notes above Rs 100 denomination and will conduct a detailed check before accepting them. However, that is not the case when it comes to smaller denomination notes,” the official said.

People are generally less cautious when handling Rs 10, Rs 20 or Rs 50 notes and rarely stop to check whether they are genuine or counterfeit. That is precisely what these networks are seeking to exploit, the official said.

Officials said the syndicates believe lower denomination counterfeit notes are less likely to attract attention, making them easier to circulate in large numbers without raising suspicion. Another official said that the period up to April 2027 will be crucial.

The biggest push would be made by these gangs to circulate fake notes of smaller denominations during these months. India plans to roll out polymer or plastic bank notes by 2028. The Reserve Bank of India (RBI) has said that polymer bank notes in the denominations of Rs 10 and 20 will be rolled out in 2028.

While the primary objective of introducing polymer notes is to increase their lifespan to nearly four times that of existing paper currency, they are also expected to offer significantly stronger security features.

Officials say the enhanced anti-counterfeiting measures will make the notes far more difficult to replicate. The plastic substrate allows for advanced security integrations which are impossible on paper. These new notes would have transparent windows, specialised metallic links and micro-optic holograms which would make them extremely difficult to forge.

Before this roll out, it is suspected that the ISI-backed gangs may look to ramp up circulation of counterfeit notes of the smaller denominations in the country. Officials say that these gangs would focus increasingly on notes of smaller denominations. Once the rollout is complete in 2028, these syndicates would look to target the Rs 50 and 100 notes more compared with the notes of the Rs 500 denomination, the agencies warned.

The RBI has repeatedly issued instructions on how to spot a counterfeit note. The apex bank says that the small denominations may not have a high value, but are used more frequently in daily transactions. This makes them a common target for fraud, and hence citizens must be more careful while dealing with such currency, officials point out.