Banknote use should be falling out of fashion, but cash in hand is actually on the rise.

A top banker has called for notes such as Kiwi one hundred dollar bills to be scrapped because he believes they are being used as a currency for criminals.

Peter Sands, the former head of Standard Chartered Bank, said a global ban on high denomination notes would help crack down on fraud.

The $100 banknote has been growing in popularity in New Zealand. Figures show the value of them in the hands of the public rose 184 per cent from $648m to $1.84b between the years 2000 and 2015.

John selkirk A Customs drug sniffer dog in action at Auckland Airport where officers seized $3.7m last year.

Yet few of the bills are seen in public, argues Sands, who has written about the phenomenon in an academic paper Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes.

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Sands said: "High denomination notes are arguably an anachronism in a modern economy given the availability and effectiveness of electronic payments alternatives. They play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy."

"The irony is that they are provided to criminals by the state."

Some action has already been taken overseas. Canada and Singapore have canned a high-denomination note apiece. In 2010, the British estimated 90 per cent of 500 Euro notes were used by criminals, and British banks were banned from issuing them.

Banknote use should be falling out of fashion, as small purchases are increasingly done electronically. But cash in the hands of the public has been increasing rapidly. This is known as the Banknote Paradox.

Internationally, only a tiny fraction of high-denomination notes are used for legitimate purposes, Sands believes. Legitimate uses include hoarding, providing emergency money while overseas, and as an alternative to local currencies by people who have lost confidence in their nation's money.

Paymark NZ, in a presentation to bankers in 2014, acknowledged cash use was prevalent in the "STD" sectors of sex, tax evasion and drugs.

Virginia Le Bas, national manager for organised crime at the New Zealand Police said high denomination notes did feature in seizures made by police from criminals. "We see more $100s and $50s than we used to," she said, but added the $20 note was still very common too.

But Sands reckons there are darker answers than tax evasion. "In most advanced economies, ordinary people do not typically use high denomination notes. They are used by criminals, and to a limited extent, by the wealthy," he said.

Sand's paper is peppered with disquieting facts.

Luxembourg issues around 15 per cent of all EU500 notes, which are known as "Bin Ladens" by criminals. Seven in ten of the EU500 notes issued in Germany between 2002-2009 were taken overseas. Half of US currency circulates outside the US. And for every US$100 note in the world, there is just $US28 of other denominations of US banknote.

Terrorism, the drugs trade and people-smuggling are all big users of high-denomination notes, Sands wrote. They are the currency of corrupt officials.

Cash is easy to get over borders in high denomination banknotes. US$1million in EU500 notes weighs just 2.2kg, compared to 22kg in EU50 notes.

New Zealand Customs uses cash sniffer dogs to find large wodges of cash being taken in and out of the country without being declared.

In the 2014 to 2015 year, it seized $3.7m - an undisclosed portion of which was New Zealand currency.