Today I was at the bank depositing some cash when the teller discovered that one of the Rs 500 bills I gave her was fake. Visual examination did not reveal that the bill was counterfeit; only under UV light can one make out that genuine bills have a silver line which glows while the same line on a fake bill does not glow.
One of the simplest ways of undermining an economy is to introduce a huge amount of fake currency. From time to time, one hears of counterfeiting operations in Pakistan. I suppose the Pakistani terrorists operating in India get paid in fake Indian currency. What a wonderful way to kill (sic) two birds with zero stones. And I presume that some of the billions of rupees of fake currency circulating in India is brought into the country via the bus and train service between Pakistan and India.
I don’t have any proof, but my suspicion is that certain political parties in India gain from this sort of transactions.
In any event, please pass the word along that accepting Rs 500 (and perhaps Rs 1000) bank notes may be risky. If people are vigilant, the fake bills will not be able to enter the system.