Indian security agencies have detected a significant tactical shift by ISI-backed counterfeit currency networks, with fake ₹10, ₹20, and ₹50 notes now being pushed into circulation in large volumes, replacing the earlier focus on higher-denomination forgeries. The development, flagged by investigators in New Delhi, points to a deliberate recalibration by syndicates — including the network allegedly run by Dawood Ibrahim — ahead of India's planned 2028 polymer banknote rollout.

The Strategic Shift in Counterfeiting

For years, criminal syndicates backed by Pakistan's Inter-Services Intelligence (ISI) concentrated their counterfeiting operations on ₹200 and ₹500 notes. According to investigators, the circulation of fake ₹500 notes has now declined sharply, signalling a change in approach.

An Intelligence Bureau official said there are credible intelligence inputs indicating that the ISI is planning to flood the market with counterfeit currency in lower denominations — specifically ₹10, ₹20, and ₹50 notes — in far greater volumes than previously seen.

Why Lower Denominations Are Being Targeted

'There are multiple reasons behind this newfound strategy. These elements are aware that people are extremely cautious about notes above ₹100 denomination and will conduct a detailed check before accepting them. However, that is not the case when it comes to smaller denomination notes,' the official said.

People generally handle ₹10, ₹20, and ₹50 notes with far less scrutiny, rarely pausing to verify authenticity. Officials say the syndicates are deliberately exploiting this behavioural gap — lower-denomination fakes attract less suspicion and can be circulated in high volumes with minimal detection risk.

The 2028 Polymer Deadline and the Surge Window

A second official said the period up to April 2027 is expected to be critical. The Reserve Bank of India (RBI) has confirmed that polymer — or plastic — banknotes in the denominations of ₹10 and ₹20 will be introduced in 2028. The primary purpose of the switch is to extend the lifespan of currency notes to nearly four times that of existing paper notes, but the new format will also carry significantly stronger anti-counterfeiting features.

The plastic substrate enables advanced security integrations — including transparent windows, specialised metallic links, and micro-optic holograms — that are not possible on paper. Agencies warn that ISI-backed networks are likely to ramp up counterfeit circulation of smaller denominations before these notes are rendered obsolete by the new technology.

Once the 2028 rollout is complete, agencies expect the syndicates to shift focus toward ₹50 and ₹100 notes rather than ₹500 notes, according to officials.

Economic Threat and the Dawood Ibrahim Network

Officials say the circulation of counterfeit currency serves a dual purpose for these networks: it finances criminal operations while simultaneously undermining India's economic stability. The Dawood Ibrahim syndicate has long been identified as a key conduit for this trade, allegedly orchestrating much of the cross-border movement of fake currency.

The RBI has repeatedly issued guidance on identifying counterfeit notes, emphasising that while small denominations carry lower individual value, their high frequency in daily transactions makes them a common — and often overlooked — vector for fraud. Citizens, the apex bank has urged, must exercise greater caution when handling such currency.

What Comes Next

Security agencies are on heightened alert through the pre-polymer window. The intelligence assessment suggests the most intensive push of fake low-denomination notes could occur in the months leading up to April 2027. With polymer notes set to make ₹10 and ₹20 counterfeits redundant by 2028, the race between criminal networks and India's currency modernisation timeline has entered a critical phase.