Relief on fake note deposits likely soon

Mail Today
August 29, 2009

The government is seriously considering a proposal by the Reserve Bank of India (RBI) for not booking unsuspecting citizens in an FIR if they are found depositing less than five pieces of fake notes on a bank counter. The Union home ministry and finance ministry together are looking at implementing this RBI proposal with the main aim of avoiding harassment to a common citizen.

Thousand of Indians have had the nightmare lately of being booked in an FIR, harassed by the police and asked to prove their innocence because a currency note they deposited on a bank counter turned out to be a fake one. Such unsuspecting citizens had to go scurrying for the source of their 'counterfeit note' - be it showing an ATM receipt or withdrawal slip or naming the person who gave them that particular counterfeit note.

A report with a recommendation has been submitted to the government on August 11 by RBI's deputy governor Usha Thorat, who headed a high-level group comprising of top brass from the State Bank of India (SBI), ICICI Bank, Infosys, RBI, Indian Banks' Association (IBA) and former director general of CRPF, S.I.S. Ahmed.

The panel has, in effect, acknowledged the fact that a common citizen is not at all equipped to differentiate between a genuine and the hiquality fake currency notes circulating in the country.

"Individuals may come in possession of a counterfeit note without knowledge of it being a counterfeit and unintentionally become a conduit for circulation of the same by presenting it to a bank, or a business establishment," says the report.

In 2008-09, out of the nearly four lakh pieces of seized fake Indian currency notes (FICN), there were nearly 2.19 lakh Rs 500 notes, over 31,000 notes of Rs 1000 denomination and over 1.33 lakh fake currency notes of Rs 100. As per Thorat's proposal now, any person inadvertently in possession of fake notes up to five pieces and tendering them at a bank counter should be exempted from legal action. The logic is that a person submitting less than five fake notes is likely to not be a FICN trafficker.

"The bank need not file an FIR in such cases. Banks should impound such notes, send them to RBI, and provide acknowledgement to the tenderer as per current guidelines. For a non-customer, ID document or fingerprints may be obtained by the banks. For a customer, banks would already have the necessary documents," says the report.

CBI director Ashwani Kumar said that the security features in the currency note series of Rs 1,000, Rs 500 and Rs 100 introduced in 2005 have got leaked and recent fake notes seized have been found to consist of most of these top- notch security features.

As per RBI figures, from April 1, 2008, till March 31, 2009, nearly four lakh pieces of fake notes worth Rs 15.57 crore were detected in India's banking channels.

This was a jump of 300 per cent from 2007- 08 when FICN worth Rs 5.49 crore were seized by our banks and 1.95 lakh notes were found to be fake. In 2006- 07, the value of 1.04 lakh FICN caught by banks was just Rs 2.31 crore. This implies that the number of fake notes caught on bank counters has increased by four times in the last two years.

Thorat's report also says, "The present system used by 'Cash in Transit' (CIT) companies for replenishing cash in the ATMs leaves scope for counterfeit notes gaining entry into the ATMs," says the report.

Courtesy: Mail Today

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