| Fake currency: The new threat | ||
| Malini Bhupta | ||
| February 6, 2009
Bhuvanesh Pandya, a small sweetshop owner in Mumbai’s distant suburb of Mira Road, has just invested in a currency detection machine after his business was hit by a barrage of fake notes. With his local bank impounding the fake currency notes each time, Pandya decided to buy a currency detector, normally used by banks and treasuries. As the economy gets flooded with fakes, these machines are the only saving grace for small businesses like petrol pumps and local corner shops across the country as India reels under the onslaught of fake Indian currency notes (FICN).
The average citizen is the worst-hit as fake banknotes have become so deeply embedded in the Indian economy that even bank branches and ATMs are disbursing counterfeit currency. From petrol stations to the local vegetable vendor, everybody is wary of accepting banknotes in denominations of Rs 500 and Rs 1,000 as a majority of the FICN are almost impossible to tell from genuine banknotes. Fake notes are not a new phenomenon; what is new is the technological sophistication involved, the sharp rise in the amount of counterfeit currency—one estimate puts it at a scary 10-20 per cent of the total currency notes in circulation which is currently Rs 6,10,000 crore— and the size and scale of ‘operation dirty money’ is coordinated by Pakistan’s ISI which stretches from Dubai, Bangkok and Singapore to neighbouring states like Nepal, Sri Lanka and Bangladesh. If the military-style raid of November 26 last year in Mumbai was an operation to undermine India’s security apparatus, Pakistan has simultaneously been waging economic terrorism by corroding India’s monetary system through fake currency injections. Even as the Reserve Bank of India (RBI) and banks are busy underplaying the magnitude of the problem by claiming that fake banknotes account for a small percentage of the money supply, the last one year has seen a dramatic increase in seizures of fake currency in every single state. According to the National Crime Records Bureau, 2,204 cases of counterfeiting were reported during 2007 and roughly Rs 10 crore worth of fake currency was seized. Sikkim, Uttarakhand and Himachal Pradesh have reported a 200 per cent, 178.6 per cent and 175 per cent increase respectively in counterfeiting cases over 2006. “Money supply or the quantum of currency notes in the system is determined by several factors and if money supply increases then it can have huge implications for the economy. The bigger damage is in the form of a crisis in people’s confidence in the currency,” says Siddhartha Roy, chief economist at the Tata Group. Not surprisingly, the border states are witnessing more of these cases as India’s borders are porous, and inherent corruption only facilitates massive inflows not just of fake currency but also narcotics. On January 29, a patrol of the Border Security Force picked up suspicious movement close to the Wagah border and when they opened fire, the shadowy figures disappeared inside Pakistan. A search of the area led to recovery of seven pistols, 13 kg of high-grade heroin and Indian counterfeit currency worth Rs 33 lakh in denominations of Rs 500 and Rs 1,000. All signs show that 2008-09 may well become a watershed year for fake currency operations. Last August, Uttar Pradesh Police uncovered over Rs 4 crore worth of FICN from two State Bank of India (SBI) branches in Domariaganj. Note of caution the money trap Given that fake currency is deeply entrenched into the economy, customers are the unsuspecting guinea pigs who not only have to bear a loss when they have been tendered a fake currency note, but also have to face cases that some banks are lodging for “handling” fake currency. So what can a customer do if he is told that the banknote he has deposited with the bank is fake? According to a master circular issued by RBI in August 2006, the particular bank is supposed to impound the fake note and stamp: “COUNTERFEIT BANK NOTE IMPOUNDED”. The bank is also supposed to give the depositor an acknowledgement receipt after stamping even if the customer refuses to countersign the receipt. Then the bank is meant to forward the counterfeit currency notes to the local police after filing an FIR. A copy of this FIR is to be sent to the Forged Banknote Vigilance Cell at the bank’s head office. All branches of banks and treasuries are also supposed to be equipped with ultraviolet lamps, but very few are. How to tell a fake Original note
 Click here to Enlarge Silver Bromide thread with RBI marks in Hindi and English are prominent. Three prominent watermarks on each note: a) Ashoka Pillar or Gandhiji’s caricature, b) Denomination and c) RBI. Sprinkled blue dots all over the note when seen in ultraviolet light. The digits “500” (denomination), super imposed on the right side, when seen horizontally. Fake Currency
 Click here to Enlarge The security thread (silver coated) and the logo, “RBI”in English and Hindi are hazy. Three watermarks are not prominent. Sprinkled dots not visible when seen in ultraviolet light. The super imposed “500” digits not visible when seen horizontally. The problem Fake currency thrives as the four main nodal agencies look at various aspects of the problem and do not coordinate. 1) CBI: The nodal agency for making states aware of the problem has territorial limitations. State police units do not cooperate fully and it has a problem of jurisdiction in cases involving countries like Nepal and Bangladesh. |
controlling counterfeit – india
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