RBI had warned banks of fake Rs1,000 notes in May

The Reserve Bank of India (RBI) had, as far back as 26 May alerted banks of fake Rs1,000 notes in circulation. More then two crore duplicate notes worth Rs2,000 crore are estimated to have entered India, a copy of the RBI note issued to Kotak Mahindra Bank showed.

RBI issued the warning after the Anti Terrorists Squad, Mumbai reported seizure of 345 counterfeit notes of Rs1,000 denomination in the series 2 AQ and 8 AC, bearing the signature of Dr Y V Reddy.

"This is the first time that counterfeiting of the higher denomination notes pertaining to the 2005-2006 series (notes with new/strengthened security features like optically variable ink, colour shift security thread etc have been brought to notice," RBI said in a notice to banks, adding, "The counterfeiting has been by printing of the notes and first visual impact is very much akin to the genuine note. The notes were got checked on CVPS/ note sorting machines and were treated as suspect/ reject by both machines."

The RBI has asked banks to alert staff to ensure the use of note sorting machines compulsorily.

Meanwhile, a high level group set up by the Reserve Bank of India has recommended a more efficient way of distributing currency to check the menace of fake notes.

The high level group on Systems and Procedures for Currency Distribution, headed by RBI deputy governor Usha Thorat, was set up in August 2008.