'Erroneous interpretation of information': RBI rejects reports on missing ₹500 notes

The Reserve Bank of India (RBI) has clarified on the claims made in a right-to-information (RTI) report of a humongous number of new ₹500 notes missing from the Indian economy. In a statement, dated June 17, 2023, the apex bank said that such claims are an “erroneous interpretation of information,” and that such reports are “incorrect.”

"The Reserve Bank of India (RBI) has come across reports circulating in certain sections of the media alleging missing of banknotes printed by banknote printing presses. The RBI emphasizes that these reports are not correct," RBI said.

"These reports are based on an erroneous interpretation of information collected under the Right to Information Act, 2005 from the printing presses. It may be noted that all banknotes supplied from printing presses to RBI are properly accounted for. It is further informed that there are robust systems in place for reconciliation of banknotes printed at the presses and supplied to RBI which include protocols to monitor production, storage and distribution of banknotes," it added.

The apex bank has requested the public to "rely on the information published by the RBI from time to time in such matters."

Last week, an RTI filed by activist Manoranjan Roy claimed that ₹500 notes worth ₹88,032.5 crore were reportedly missing from the Indian economy. According to the report, the three currency printing presses of India were asked to design 8,810.65 million units of new ₹500 notes in 2016-17. However, the RBI only received ₹7,260 million units of new ₹500 currency notes. For the initiated, Bengaluru-based Bhartiya Reserve Bank Note Mudran, Nashik-based Currency Notes Press and Dewas-based Bank Note Press are the three units where the domestic currencies are printed.

Last month, the apex bank said that counterfeited ₹500 notes surged by 14.4% in 2022-23. In its annual report, RBI said that Indian banks have detected as many as 91,110 fake ₹500 notes worth ₹4.55 crore in 2022-23. During 2022-23, out of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 4.6% were detected at the Reserve Bank and 95.4% at other banks. This does not include counterfeit notes seized by the police and other enforcement agencies.

Compared to the previous year, there was an increase of 8.4% and 14.4% in the counterfeit notes detected in the denominations of ₹20 and ₹500 (new design), respectively, the RBI report said. The counterfeit notes detected in the denominations of ₹10, ₹100 and ₹2000 declined by 11.6%, 14.7% and 27.9%, respectively.

According to RBI's annual report, the value of banknotes in circulation rose 7.8% year-on-year to ₹33.48 lakh crore in 2022-23 as compared with 9.9% during the previous fiscal. The share of ₹500 and ₹2000 notes together accounted for 87.9% of the total value of banknotes in circulation as on March 31, 2023, as compared to 87.1% as on March 31, 2022.

In volume terms, currency in circulation increased 4.4% to 13,621 crore pieces during the year ended March 2023. ₹500 denomination constituted the highest share at 37.9%, followed by ₹10 denomination banknotes which constituted 19.2% of the total banknotes in circulation as on March 31, 2023.