Counterfeiters are trying to swindle Australians out of their $100 notes with a threefold increase in dodgy notes.
Figures from the Reserve Bank show the number of counterfeit versions of Dame Nellie Melba and Sir John Monash uncovered through the 2012-13 financial year increased 339 per cent to 2650.
The $100 notes are growing in demand from banks and consumers and the number in circulation jumped 8 per cent last year to an all-time high.
There are now 1.2 billion banknotes, or $56.9 billion, in the nation's purses, wallets and pockets.
The most popular note continues to be the $20.
The increase in notes also draws in criminal gangs who try to counterfeit the Reserve's polymer currency.
Counterfeiting peaked in 2010 when a NSW-based gang was busted.
But after falling in 2011-12, counterfeiting is back on an upward trend.
Over the past 10 years the rate of counterfeit notes has doubled.
To fight back, the Reserve revealed in its annual report it planned to upgrade notes to make them more difficult to copy.
Governor Glenn Stevens, who was paid $1 million last financial year, said because most notes were about 20 years old, they needed to be upgraded.
"The new banknotes will retain key design elements of the current banknote series, such as their colour, their size and their portraits, but some design changes will be necessary to accommodate the new security features," the report said.
It will take several years before the new notes are brought into production, with the bank planning to store the notes in a more secure facility.
The annual report also noted the bank made its third biggest profit, pulling in $4.3 billion, mainly on the back of a fall in the value of the Australian dollar.
This pushed up the value of the bank's holdings of overseas currencies.
It was only surpassed by its $8.8 billion profit in 2008-09 and a $4.4 billion profit in 1997-98.
This week, Treasurer Joe Hockey revealed he would give an $8.8 billion grant to boost the bank's reserve fund.
This move will drive up the Federal Budget deficit and increase long-term interest payments.The annual report, however, revealed the bank had expected its reserve fund to be rebuilt gradually rather than in a huge one-off grant.