Cash handling
Fake ₹500 notes are rising: how to stop them at your cash counter
Banks found 1,41,907 fake ₹500 notes in 2025-26, up 20.5% in a year, and a fake note earns no credit when you deposit it. The answer is a check at the moment you take cash: a note counting machine with UV, MG and IR detection on every payment, and a hand check of any note it stops on.
· 7 min read · By Dhyey Mehta
Most fake notes are not caught when they change hands. They are caught later, at the bank, by which time the shop that took them has already lost the money. This guide sets out how common fake notes are in India today, who carries the loss, what the checks on a note counting machine actually look at, and a simple routine that stops fakes at your counter.
The figures come from the Reserve Bank of India. The machine details are those of the Semsons ST810 note counting machine, as published in its manual.
How common are fake notes in India now?
More common than a year ago, and concentrated in the note a shop handles most. The RBI Annual Report 2025-26 records 2,29,746 counterfeit notes detected in the banking system that year, up from 2,17,396. The ₹500 note alone accounts for 1,41,907 of them, about 62% of all fakes found.
| Denomination | 2024-25 | 2025-26 |
|---|---|---|
| ₹500 | 1,17,722 | 1,41,907 (up 20.5%) |
| ₹100 | 51,069 | 45,621 |
| ₹200 | 32,660 | 30,591 |
| ₹50 | 12,015 | 10,274 |
| ₹2,000 | 3,508 | 824 |
| All denominations | 2,17,396 | 2,29,746 |
One more figure matters to a business: 97.6% of these counterfeits were detected at banks, not at the Reserve Bank itself. In practice that means at the counter or in the back office of a bank branch, when someone deposits cash. Somebody had already accepted every one of those notes as genuine.
Who loses the money when a fake note is found?
The person who deposits it. The RBI Master Direction on Counterfeit Notes tells banks to stamp a counterfeit "COUNTERFEIT NOTE" and impound it. No credit is given for it, and it is never handed back. When five or more counterfeits turn up in a single transaction, the bank forwards them to the police for an FIR; smaller finds are reported to the police at the end of the month.
So a fake ₹500 note taken at your counter costs you ₹500 the day you bank it, and a bundle with several fakes in it brings police paperwork as well. The only point at which a business can avoid the loss is the moment the cash is handed over.
Where fake notes get into a business
- Busy counters. At peak hours nobody looks closely at each note in a payment.
- Large cash payments. A jewellery or bullion purchase, a booking amount or a fee paid in ₹500 notes gives one fake plenty of company.
- Shift changes and closing time. Tired staff counting a full till are counting, not checking.
- Field collections. Cash collected from the market comes back in mixed bundles from many hands.
Why checking by eye is not enough at a busy counter
Genuine rupee notes carry many security features, and the RBI lists them on its banknote security page: the Mahatma Gandhi watermark, a security thread that shifts from green to blue when you tilt the note, the see-through register that forms one design against the light, the colour-shifting numeral, micro lettering and fluorescence. Each one is a good check. Each one also needs light, a tilt or a magnifying glass, and a few seconds of attention.
Multiply a few seconds by every note in a ₹50,000 payment and it does not happen in a queue. A machine checks every note at the same speed it counts them, and stops only on the ones that need a closer look.
What a note counting machine actually checks
| Check | What it looks at |
|---|---|
| UV (ultraviolet) | The paper under ultraviolet light. On genuine notes the number panels are printed in fluorescent ink and optical fibres show up; fakes are often printed on ordinary bleached paper that glows |
| MG (magnetic) | Magnetic features. The RBI describes the security thread on notes of ₹100 and above as machine-readable and magnetic |
| IR (infrared) | Printed features of the note that show under infrared light |
| DD (dimension) | The size of each note |
| Half, chained and double notes | A torn half note, notes stuck together in a chain, and two notes passing as one, which throw a count off |
When a check fails, a good counter stops and tells you which check it was, so you can take that note out. On the ST810 an EE1 code means the UV check, EE2 the magnetic check, EE4 a half note and EE5 notes stuck in a chain.
What a machine cannot do is promise that every note it passes is genuine. It catches the fakes that fail its checks, every time and at full speed, which no person at a busy counter can do. Treat a stop as a warning, check the note by hand, and never treat a clean count as a certificate.
A counter routine that keeps fakes out
- Count every cash payment on the machine, with UV, MG and IR switched on. Free count mode (CNT on the ST810) switches the checks off, so keep it for notes you have already checked.
- Count in front of the customer. If the machine stops, the note is still in the customer's payment, not in your drawer.
- Check any note the machine stops on by hand: the watermark, the colour-shift thread and the see-through register. If you are not satisfied, ask for another note.
- Never pass a suspect note on. Knowingly using a counterfeit note as genuine is a criminal offence, and it will be caught at the next bank anyway.
- Band bundles with batch counting. BATCH stops every 100 notes, ready for a band, and ADD keeps a running total across stacks at closing time.
- Keep the sensors clean. Paper dust settles on the light sensors. Switch off and brush them clean regularly, and never use water or spray cleaners.
How the ST810 fits this routine
The ST810 is the note counting machine we sell for shop counters, cash desks and offices. It was built around exactly this job:
| What you need at the counter | ST810 |
|---|---|
| Speed | Up to 900 notes a minute, so a 100-note bundle passes through in under 10 seconds |
| Fake note checks | UV, MG, IR and DD (dimension), plus half-note, chained-note and double-note detection |
| On a suspect note | Stops and shows a code for the check that failed |
| Bundles and totals | BATCH (preset 100) and ADD |
| Hopper and stacker | 130 notes each |
| Start | Automatic when notes go in, or with the START key |
| Voice and display | English voice prompts, display with mode indicators, external display port |
| Size and power | 290 × 250 × 175 mm, 4.1 kg, under 45 W, 110–240 V |
| Warranty | 1 year from the invoice date; replacement within 7 days of delivery for a manufacturing defect |
| Price | ₹5,399 including GST at the time of writing, delivered free in India |
If you would rather have an LCD with a separate batch display and UV and MG sensitivity you can set in nine levels, the ST2330 does the same counting job without the size check. Both are listed under currency counting machines, and our note counting machine buying guide compares them side by side.
Order the ST810 online, or call +91 98216 12340. For several counters or branches, the wholesale desk is on +91 80823 38010.
Answers
Related questions
Can a note counting machine detect every fake note?
No. A counter with UV, MG and IR detection checks the paper under ultraviolet light, the magnetic security thread and features that show under infrared light, and it stops on a note that fails. That catches the fakes that fail those checks, but no machine catches every counterfeit. Treat a stop as a warning and check that note by hand before you accept it.
What do UV, MG and IR mean on a note counting machine?
UV is the ultraviolet check: genuine rupee notes show fluorescent number panels and optical fibres under ultraviolet light, while ordinary bleached paper glows. MG is the magnetic check: notes of ₹100 and above carry a machine-readable magnetic security thread. IR is the infrared check, which reads printed features that show under infrared light. DD, where a machine has it, checks the size of each note.
What happens if I deposit a fake note in my bank account?
Under the RBI Master Direction on Counterfeit Notes, the bank stamps the note "COUNTERFEIT NOTE", impounds it and gives no credit for it, and the note is not returned. If five or more counterfeit notes are found in a single transaction, the bank sends them to the police for an FIR.
Which fake notes are most common in India?
The ₹500 note. The RBI Annual Report 2025-26 records 1,41,907 counterfeit ₹500 notes detected in the banking system that year, 20.5% more than the 1,17,722 a year earlier, out of 2,29,746 counterfeit notes of all denominations.
What should a shop do if a customer hands over a suspect note?
Do not accept it. Ask politely for another note, and never pass a suspect note on to anyone else, because knowingly using a counterfeit note as genuine is a criminal offence. If you believe someone is deliberately passing fakes, tell your local police station.
How much does a note counting machine with fake note detection cost?
At the time of writing (October 2026) the Semsons ST810, with UV, MG, IR and size detection, is ₹5,399 including GST, and the ST2330, with UV, MG and IR detection and an LCD batch display, is ₹5,699 including GST. Both are delivered free in India.