One of the many reasons for the demonetisation of Rs 500 and Rs 1,000 banknotes in 2016 was the mounting threat of Fake Indian Currency Notes, or FICNs. All banknotes in the Mahatma Gandhi (old) series denominations were proclaimed "worthless pieces of paper" at the stroke of midnight on April 8, 2016.
The government replaced the previous Rs 500 demonization notes with new Mahatma Gandhi series notes in November 2016. The new currency notes, it was argued, would be beneficial in combating terrorism and corruption, among other things.
It was also reported at the time of their issuance that the new notes would have extra security measures that would make counterfeiting harder.
However, counterfeit banknotes of the value of Rs 500 were discovered to be gaining currency, according to the Reserve Bank of India's (RBI) annual report for 2020-21.
According to the RBI, counterfeit notes identified in the denomination of new Rs 500 notes increased by 31.3 percent in 2020-21 compared to the previous year. The number of counterfeit notes found in other denominations, on the other hand, has decreased. The Reserve Bank of India currently prints notes in the denominations of Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500, and Rs 2,000.
During the year, 39,453 fake Mahatma Gandhi (New) Series banknotes were discovered, while 1.11 lakh fake Rs 100 notes were identified.
The RBI study further stated that during the year, a total of 2.09 lakh fake banknotes of all denominations were discovered. This was a considerable decrease from the 2.97 lakh fraudulent notes discovered in 2019-20.
The new Rs 500 notes differ from previous series in terms of colour, size, theme, security features, and design characteristics. The new note is 66mm x 150mm in dimension. The notes are stone grey in colour, with the major new motif being the Indian historic site of Red Fort.
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