<h3>Overview</h3>
<p>The <span class="key-term" data-definition="Reserve Bank of India — India’s central banking institution responsible for monetary policy, currency regulation, and financial stability (GS3: Economy)">RBI</span> released its annual report for the financial year 2025‑26, showing a 5.7% increase in the detection of counterfeit notes. The surge is driven mainly by fake <span class="key-term" data-definition="₹500 denomination — the high‑value banknote in circulation, often targeted by counterfeiters (GS3: Economy)">₹500</span> and <span class="key-term" data-definition="₹200 denomination — a mid‑value banknote, also vulnerable to forgery (GS3: Economy)">₹200</span> notes.</p>
<h3>Key Developments</h3>
<ul>
<li>Total counterfeit notes detected rose to <strong>2,29,746</strong> pieces, up from 2,17,396 the previous year.</li>
<li>Fake <span class="key-term" data-definition="₹500 denomination — the high‑value banknote in circulation, often targeted by counterfeiters (GS3: Economy)">₹500</span> notes increased 20.5% to <strong>1,41,907</strong> pieces.</li>
<li><span class="key-term" data-definition="₹20 denomination — the lowest‑value note in current circulation, frequently used in daily transactions (GS3: Economy)">₹20</span> counterfeit notes jumped 47.4% to <strong>373</strong> pieces.</li>
<li>Counterfeit <span class="key-term" data-definition="₹200 denomination — a mid‑value banknote, also vulnerable to forgery (GS3: Economy)">₹200</span> notes fell to <strong>30,591</strong> pieces, while <span class="key-term" data-definition="₹100 denomination — a widely used note in India’s cash economy (GS3: Economy)">₹100</span> notes declined to <strong>45,621</strong> pieces.</li>
<li>Detection by the RBI itself remained low at <strong>5,412</strong> notes (2.4% of total), with the remaining 97.6% found by other banks.</li>
</ul>
<h3>Important Facts</h3>
<p>• The withdrawal of the <span class="key-term" data-definition="₹2,000 denomination — a high‑value note removed from circulation in 2023 to curb black money and counterfeit activity (GS3: Economy)">₹2,000</span> note led to a sharp fall in its counterfeit detections, from 3,508 to <strong>824</strong> pieces.<br>
• Disposal of soiled banknotes dropped by 28.6%, from 2.38 lakh to 1.72 lakh pieces. The highest disposal volume remained for <span class="key-term" data-definition="₹500 denomination — the high‑value banknote in circulation, often targeted by counterfeiters (GS3: Economy)">₹500</span> notes (59.8 lakh pieces).</p>
<h3>UPSC Relevance</h3>
<p>The data highlights challenges in <span class="key-term" data-definition="currency management — the process of issuing, circulating, and withdrawing banknotes to ensure a stable cash supply (GS3: Economy)">currency management</span>. Aspirants should note the RBI’s role in safeguarding the integrity of the monetary system, a frequent topic in GS3. The rise in counterfeit activity underscores the need for stronger surveillance, forensic
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