The government is preparing sweeping new legislation to combat the growing circulation of high-quality counterfeit currency, proposing prison terms of up to seven years not only for counterfeiters but also for anyone found knowingly possessing or using fake banknotes.
The proposed Fake Currency Prevention Act, 2026, drafted by the Financial Institutions Division (FID) under the Ministry of Finance, aims to replace the fragmented legal framework currently governing counterfeit currency offences with a dedicated law targeting the entire production and distribution network.
The draft has been published for public consultation and circulated among relevant ministries before being placed before the Cabinet for approval.
Officials say the new law responds to the growing sophistication of counterfeit syndicates, which now use high-resolution scanners, advanced graphic design software, specialised inks and chemical coatings to produce fake notes that closely resemble genuine currency.
Under the proposed law, manufacturing, importing, transporting, storing, distributing or attempting to circulate counterfeit currency would become serious criminal offences. It also criminalises knowingly keeping or using fake banknotes in commercial transactions, with offenders facing up to seven years’ imprisonment alongside substantial financial penalties.
The legislation also targets the infrastructure behind counterfeiting operations. Upon court order, authorities would be empowered to seize and permanently destroy equipment used in producing fake currency, including computers, laser printers, scanners, graphic design software, printing plates and specialised security materials.
To strengthen prosecutions, the draft introduces a provision under which certification by a designated Bangladesh Bank currency officer would be accepted as primary expert evidence in court, reducing reliance on lengthy forensic examinations that often delay trials.
According to the Financial Institutions Division, existing prosecutions are conducted under scattered provisions of the Penal Code and the Special Powers Act, creating procedural gaps during investigation and trial.
Financial Institutions Division Secretary Nazma Mobarek said the draft would be finalised after incorporating feedback from the public and government agencies.
The move comes as law enforcement agencies continue to struggle against organised counterfeit networks.
Data from Dhaka’s 50 police stations show that between 2010 and 2024, authorities registered 708 counterfeit currency cases involving 1,307 arrests, yet only four cases were fully resolved, resulting in just 13 convictions.
Investigators say prosecutions frequently collapse because of weak first information reports, inaccurate addresses of suspects, missing witnesses and defective charge sheets.
The proposed law seeks to address those shortcomings by making most counterfeit currency offences cognisable, non-bailable and non-compoundable, significantly limiting opportunities for accused persons to secure quick release or settle cases outside court.
Authorities say counterfeit operations typically intensify during major festivals, when large volumes of cash circulate through markets.
During this year’s Eid-ul-Azha, Detective Branch police dismantled counterfeit production units in Tongi and Gulistan and recovered fake banknotes with a face value exceeding Tk34 lakh.