The decision to do away with Rs 500 and Rs 1,000 currency note will help tackle the acute problem of counterfeit currency
GN Bureau | November 10, 2016
The government’s announcement to scrap Rs 500 and 1000 currency notes will go a long way towards bringing halt to the circulation of counterfeit currency in the country. The common man finds it virtually impossible to distinguish between a genuine currency note and a fake one. Most of the times it takes the expert eye of a bank teller to spot a fake one. We are reissuing a story on counterfeit money that appeared in November 16-30, 2014 issue.
Fake in India: a counterfeit economy
Sahil got a shock when the bank employee told him that one of the 20 notes of Rs 500 he had brought to deposit was a counterfeit. He was also embarrassed – at being fooled as well as being possibly taken for a criminal. He first argued that he did not know, a common man like him could not be expected to cross-check all the security parameters (there are 14 of them, to be precise), and the bank should accept the note. The Safdarjung Enclave branch of Central Bank of India refused.
Sahil was lucky, though. His father, who runs a small confectionery shop in Arjun Nagar of south Delhi, managed to catch the customer who had passed the dubious note on to him. Now was the customer’s turn to be shocked and embarrassed, but he changed the note.
In the process, however, the dubious currency note won another life.
It had started its journey, most likely from a sophisticated printing press in a neighbouring country. It had crossed the border possibly near Malda in West Bengal – as part of a bunch of fake notes with a total face value of Rs10-15 lakh in a gunny sack thrown in a nullah from one side of the border and picked up on the other side. Now it would continue to circulate, changing hands as a genuine one and harming the economy. Travelling alone, it cannot be captured by any law enforcement agency. The only way to catch it and put it out of business is when it comes to a bank counter.
That is why the Reserve Bank of India (RBI) has asked banks to net fake notes, not reject them. It wants banks to accept all cash, without bothering about veracity, and give due credit to the customer. Counterfeits are to be filtered out at the back office. The RBI directive says, “In no case, the counterfeit notes should be returned to the tenderer.”
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