It’s not easy yet to wish away the sway of counterfeit currency. Yet, the growth of the digital banking system is reassuring that the bane of fake notes can be largely, if not fully, overcome with sustained efforts. The Unified Payments Interface (UPI), India’s own digital payment system, is gaining wide currency and connects over 300 banks. Having started the push since 2016, the volume of digital UPI transactions has grown from a meagre Rs 1.8 crore in 2016-17 fiscal to a whopping 8,400 crore in the last fiscal and has crossed 10 billion recently. Globally, such transactions were of the order of $1.7 trillion in fiscal 2023, as a functionary of the National Stock Exchange has stated. UPI provides an easy, practical and safe way to make payments and it connects India with the world. At an individual level, it can be done with the press of a button on one’s mobile phones. Across cities and rural areas, even payments at groceries and pan shops are done by many today via this mode.
RBI governor Shaktikanta Das, in a speech in Mumbai on Thursday, noted that UPI has played a “phenomenal” role in the fin-tech revolution here and that its success has become an international model. The system is also being made use of by NRIs and others abroad in personal as also business transactions. Prime Minister Narendra Modi’s recent visit to the Gulf region has led to the introduction of this system there, where millions of Indians live and work. In India’s near-neighbourhood, the system was adapted by Singapore this year.
The fake note scenario had turned lethal to the national economy with the pumping in of Pakistan-printed notes, largely through porous borders from Bangladesh and Nepal and by maritime routes too. Notably, the nation’s fight against counterfeit currency took a serious turn after the high-denomination note ban on November 8, 2016 — ostensibly to check the sway of Pak-printed currency. That was the time when the central government started the push for digital transactions through the introduction of some apps. However, such a campaign weakened after a while, rather than the government more aggressively encouraging one and all to adapt themselves to this mode of payment wherein the need for currency payments is eliminated. Yet, the detection of counterfeit currency notes by RBI and banks showed a 10 percent increase in 2021 – the number of fake Rs 500 notes having risen by 102 per cent compared to the previous year. The withdrawal of Rs 2000 notes from circulation by the middle of this year should also work against the tendencies of hoarding of currency and circulation of fake notes. Its introduction itself was a wrong step.
