The number of counterfeit notes detected by private banks in India grew by 23 percent from 2010-2011 to 2011-2012, reported the Reserve Bank of India on Sunday, with the Indian government set to introduce plastic notes across five cities by the end of this year in an effort to reduce forgery and thwart other illegal activities related to fake currency.

According to the Business Standard,462,865 fake currency were detected in 2011-2012, compared to 376,460 in 2010-2011; and while part of the reason behind the increase has been put down to the increase of note sorting machines that can detect fake notes, security agencies also acknowledge that the increasing quality of fake notes was also making it even more difficult to detect them.

"Around 95 percent of the features of new fake notes are similar to those of genuine notes," told a police officer to the Times of India.

"The quality of paper is the same, the colour and the ink are the same; counterfeiters are now trying to meticulously copy the micro-lettering," he added.

Furthermore, Indian counterfeiters are using the very same imported paper that the government uses to print notes, the agencies say.

As a result, the Indian government, in collaboration with the RBI, has decided to introduce polymer/plastic notes on a field trial basis in Jaipur, Shimla, Bhubaneshwar, Mysore and Cochin.

The selection of these locations, according to the finance ministry, was done to keep in view both geographical location and climatic conditions.

In addition, under the framework of the Indo-US homeland security dialogue launched in May 2011, India has enlisted the help of the United States to combat counterfeit currency, including visits to facilities in the U.S. related to the detection of fake notes.

According to the Times of India, about two million additional fake notes, making up over 100 million rupees, were also seized in the first half of this year. In 2011, about six million counterfeit notes, accounting for 260 million rupees, were seized.

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