Rs.500 currency note.Reuters

The Indian government has empowered the National Investigation Agency (NIA), under the National Investigation Agency Act, to inquire into the fake currency racket in the country and prosecute those held responsible, according to Namo Narain Meena, the Minister of State for Finance. The announcement was made on Friday, in the Lok Sabha.

The Minister also said that multi-dimensional aspects of the fake currency racket were being addressed by several agencies, working in tandem to thwart the illegal activities. The agencies in question are:

1)      Reserve Bank of India (RBI)

2)      Ministry of Finance

3)      Ministry of Home Affairs (MHA)

4)      The security and intelligence agencies of the centre and various states, and

5)      Central Bureau of Investigation (CBI)

A statement from the Ministry of Finance said the agencies' progress would be reviewed periodically, by a nodal group set up for this purpose. In addition, to fight this problem, the CBI has been declared the nodal agency to ensure co-ordination with various states and the Directorate of Revenue Intelligence (DRI) has been nominated as the "Lead Intelligence Agency" in the matter.

Meanwhile, the government had earlier constituted a Terror Funding and Fake Currency Cell in 2010, under the NIA, to focus on further investigations in concerned fields.

Furthermore, the security features in high value currency notes are being constantly upgraded by the RBI, which has also strengthened mechanisms for the detection of counterfeit notes, the statement claimed, adding that a special group had been formed in the MHA to share intelligence/information amongst different security agencies to counter the circulation of fake currency notes.

According to data provided by the RBI, there are 435,607 pieces of fake currency notes between April 2010 and March 2011. The apex bank has also reported 25 complaints regarding receipt of counterfeit notes through ATMs, between Jan. 7, 2008 and Oct. 31, 2011.

Here is a table showing RBI's data on fake notes detected by banks:

Year Rs.10 Rs.20 Rs.50 Rs.100 Rs.500 Rs.1000 Total(Pieces)
April, 2010 to  March, 2011 139 126 10,962 124,219 246,049 54,112 435,607
April, 2011 to Sept. 2011 40 158 6156 65,782 152,930 39,216 264,282

Source- Ministry of Finance.