Tough New Law Proposed to Crack Down on Counterfeit Currency Networks

The government has drafted a comprehensive new law proposing up to seven years' imprisonment for possessing counterfeit banknotes, as criminal networks increasingly exploit advanced digital technology to circulate fake currency across the country.

Prepared by the Financial Institutions Division (FID) under the Ministry of Finance, the proposed Counterfeit Currency Prevention Act, 2026 seeks to dismantle counterfeit currency syndicates by strengthening legal provisions and closing gaps in the existing framework.

The eight-page draft has been circulated among relevant ministries and published on the FID website for public consultation.

Under the proposed legislation, manufacturing counterfeit currency, attempting to produce fake notes, or knowingly possessing or distributing them would be punishable by stringent criminal penalties.

Most offences under the draft are classified as cognisable, non-bailable, and non-compoundable, enabling law enforcement agencies to register cases and begin investigations without prior court approval while limiting the scope for bail or out-of-court settlements. According to the FID, the law is intended to address shortcomings in existing legislation, including the Penal Code, which have often hindered effective investigation and prosecution.

The draft also authorises courts to confiscate and destroy equipment used in counterfeiting operations, including computers, high-resolution colour printers, specialised ink and paper.

To address emerging forms of forgery, the proposed law introduces clear legal definitions for several types of counterfeit currency. It defines tampered notes as genuine banknotes whose denomination or security features have been altered to deceive users. Bleached notes refer to genuine banknotes that have been chemically stripped of their original print and reprinted with higher denominations. Mismatched notes are described as counterfeit notes assembled by combining different sections or serial numbers from separate genuine banknotes.

The legislation further empowers designated Currency Officers of Bangladesh Bank to examine and certify suspected counterfeit notes, with their findings serving as authoritative evidence in court proceedings.

The proposed law comes amid growing concerns over the increasing sophistication of counterfeit currency networks. Since 2015, law enforcement agencies—including the Rapid Action Battalion (RAB), Criminal Investigation Department (CID), Detective Branch (DB) and Border Guard Bangladesh (BGB)—have repeatedly uncovered counterfeit currency factories, particularly ahead of Eid festivals when cash transactions rise sharply.

Although Bangladesh Bank required commercial banks to install currency verification machines in 2016, investigators found that counterfeiters had adopted advanced digital printing technologies by 2018. By 2023, fake currency was being openly marketed through social media platforms, prompting the central bank to issue public warnings against online scams.

The continuing threat was underscored ahead of this year's Eid-ul-Azha, when the Detective Branch seized counterfeit notes worth nearly Tk34 lakh during separate raids in Tongi and Gulistan. The operation prompted Bangladesh Bank to set up emergency counterfeit detection booths at cattle markets across the country.