Robert Go, Jakarta – When Mr Haryanto, who runs a hardware store in West Jakarta, takes a payment from a customer these days he quickly scans the rupiah bills under a blue-light device designed to spot fakes.

"Some of the fakes are very difficult to tell apart from the genuine bills," he said.

Counterfeit bills have always been in circulation in Indonesia but there are now signs that the problem is on the rise.

The police have no firm data on just how many fake rupiah notes are out there but the few arrests they have made suggest that counterfeiters are operating nationwide.

In February, police in Pekanbaru, Riau, arrested a distributor of 50,000-rupiah bills. Their captive was carrying 10 million rupiah in fake bills at the time of his arrest.

Police in Bogor, West Java, last year arrested as many as 15 different counterfeiters and seized fake money 'worth' more than 10 billion rupiah.

In July 2000, investigators in Bandung, also in West Java, broke up a counterfeiting ring involving employees of Bank Indonesia, the country's central bank.

On the streets today, many people remain wary enough of fakes that some lick bills to see whether the colours run, or subject them to "rub and crumple" or other tests.

Ms Marsiyah, a food vendor in Central Jakarta, said she was cheated by a group of young thugs a few weeks ago.

They passed her 50,000 rupiah to pay for food items worth 7,500 rupiah and ran away quickly after getting their change. The note, of course, turned out to be a fake. The vendor said: "They not only didn't pay for their food but stole money from me. I just sat down and cried for most of that day."

The police said they are doing all they can to nab counterfeiters, but there are speculations that members of the security force are involved. Some sting operations have caught serving or former military or police personnel red-handed.

One of the most notorious cases occurred in September 2000, when two retired military officers were arrested in Surabaya with 20 billion rupiah in fake money.

They pointed their fingers at superiors, including the former Armed Forces commander and Cabinet minister, General Wiranto, who ordered the project to finance the militia's terror campaign in East Timor.

The problem has forced businessmen like Mr Haryanto to do a little detective work of their own before putting money into their cash drawers. And it has led to a boom in detection devices, some of which are sold for as little as 50,000 rupiah on the streets and run on battery power.

Some shops visited by The Straits Times reported selling five to 10 units each week, and sometimes more.

Even though the machines are little more than ultraviolet lights, many Indonesians swear by their cheap anti-counterfeit devices.