The government is set to introduce a new law to tackle counterfeit currency, proposing a maximum of seven years imprisonment for knowingly possessing or using fake banknotes.
The Financial Institutions Division under the Ministry of Finance has prepared an eight-page draft of the Counterfeit Currency Prevention Act, 2026 and circulated it among relevant ministries and agencies for feedback. The draft has also been published on the division's website for public comments.
The proposed law introduces tougher penalties for offences related to counterfeit currency, including production, distribution, transportation, storage and circulation. It also outlines separate legal provisions for investigation, seizure and prosecution of such offences.
According to the Financial Institutions Division, the proposed legislation aims to address the limitations of existing laws and strengthen Bangladesh's ability to combat increasingly sophisticated counterfeit currency crimes driven by modern technology.
Under the draft law, manufacturing or attempting to manufacture counterfeit notes, collecting special paper, ink or security materials used for producing fake currency, as well as importing, exporting, transporting, selling or distributing counterfeit notes, will all be treated as criminal offences.
The draft also states that anyone who knowingly keeps counterfeit notes in their possession or uses them in financial transactions will face legal action, with a maximum punishment of seven years' imprisonment.
Draft law seeks tougher action against counterfeit currency
The proposed Counterfeit Currency Prevention Act, 2026 aims to bring all offences related to counterfeit money under a single legal framework, replacing the current system where such crimes are addressed through scattered provisions in different laws.
According to the draft, authorities will be empowered to seize and confiscate computers, printing equipment, special paper, ink and other materials used to produce counterfeit notes. Courts will also be able to order the destruction of counterfeit currency and seized equipment, allowing law enforcement not only to recover fake notes but also to dismantle production networks.
Financial Institutions Division Secretary Nazma Mobarek told Prothom Alo that the draft would be finalised after incorporating feedback before being placed before the Cabinet for approval.
The proposed law also introduces clear definitions of different forms of counterfeit currency. It classifies tampered notes, bleached notes—where chemicals are used to erase original printing before reprinting and mismatched notes made by combining parts or serial numbers from different banknotes.
As a result, altering the denomination or security features of genuine notes, chemically modifying them or assembling new notes from different banknotes will all be treated as counterfeiting.
The draft further proposes assigning Bangladesh Bank-designated currency officers the authority to examine suspicious banknotes and officially certify whether they are counterfeit. Their certification will be admissible as key evidence in court, strengthening investigations and prosecutions.
Another key provision of the draft is the proposal to classify most counterfeit currency offences as cognisable, non-bailable and non-compoundable. This would allow police to register cases and begin investigations without prior court approval, while limiting the scope for bail or out-of-court settlements. The draft also sets out detailed procedures for investigations, evidence preservation, court jurisdiction and trial proceedings.
Counterfeit currency methods evolved over past decade
Counterfeit currency operations in Bangladesh have become increasingly sophisticated over the past decade, prompting intensified crackdowns by law enforcement agencies and tighter monitoring by the central bank.
Since 2015, the Rapid Action Battalion (RAB), Criminal Investigation Department (CID), Detective Branch (DB) of police and Border Guard Bangladesh (BGB) have regularly conducted raids on counterfeit currency factories and organised syndicates, particularly in Dhaka and border areas. Such operations typically increase ahead of Eid-ul-Fitr and Eid-ul-Azha, when higher cash transactions create greater opportunities for circulating fake notes.
Bangladesh Bank began directing commercial banks in 2016 to strengthen counterfeit note detection by using currency verification machines, promptly sending suspicious notes to the central bank and raising public awareness.
Investigations since 2018 have found that counterfeiters are increasingly using advanced computers, high-resolution colour printers and digital technologies to produce fake currency. In 2023, law enforcement agencies also reported attempts to trade counterfeit notes through social media platforms.
Earlier this year, Bangladesh Bank urged the public not to be misled by rumours about counterfeit currency circulating on social media and advised people to verify the security features of banknotes before accepting them.
Ahead of this year's Eid-ul-Azha, the central bank instructed authorities to set up counterfeit currency detection booths at cattle markets across the country. Around the same time, the Detective Branch (DB) of Dhaka Metropolitan Police seized counterfeit notes worth nearly Tk 3.4 million in separate drives in Tongi and Gulistan.
