Missing Raghuram Rajan Signature Costs Indian Exchequer 36 Crore

31/07/2015 1:28 PM IST | Updated 15/07/2016 8:25 AM IST
PUNIT PARANJPE via Getty Images
Reserve Bank of India's (RBI) newly appointed governor Raghuram Rajan (L) and outgoing governor Duvvuri Subbarao arrive for the hand over ceremony at the RBI headquarters in Mumbai on September 4, 2013. Top economist Raghuram Rajan, renowned for predicting the 2008 global financial crisis, takes over as head of India's central bank on September 4, amid the country's worst financial storm in years. AFP PHOTO/ PUNIT PARANJPE (Photo credit should read PUNIT PARANJPE/AFP/Getty Images)

The scourge of India's government ministries and Financial-Nitpicker-In-Chief, the Comptroller and Auditor General (CAG) of India, has pulled up a government PSU, for printing currency notes with the wrong RBI governor's signature and thus inflicting a Rs 36-crore loss to the country.

The Hindustan Times reports that the CAG has chided the Security Printing and Minting Corporation of India Limited for costing India an unnecessary Rs 36.69 crore loss, as it continued to print Rs 20, Rs 100 and Rs 500 denomination notes with former RBI governor Subbarao's signature in 2014, even though he had already retired from the organisation.

D Subbarao, who was the RBI governor from September 5, 2008, to September 4, 2013, preceded Raghuram Rajan, who took over on September 4, 2013.

However, this isn't an entirely new problem. In March 2014, when reports of this 'goof up' surfaced, the RBI clarified that the mis-printed notes continued to be legal tender. The Central Bank told the Press Trust of India that it wasn't easy to rapidly change new production lines to accommodate new requirements.

‘To complete the process in all the banknote presses for all denominations of banknotes is a programme which is under way and is expected to be completed in due course,’ the central bank said in a statement. "Making changes in the process is a tedious process and takes time, in order to keep the disturbance in production to the minimum extent."

CAG's quibble apart, it hasn't explained how the errant notes are a loss even as notes bearing Raghuram Rajan's signature are now ubiquitous.

India being an intensely cash-dependent economy now has nearly Rs.14.265 trillion in currency notes in circulation as on 20 March, which translates into 12.3% of India’s gross domestic product (GDP).

An analysis by Mint of the currency-supply trends in India showed that though Rs 10 notes were the most common, inflation and the general growth of the economy had seen a meteoric rise in the printing of Rs 1000 and Rs 500 notes, some of those which bear Subbarao's erroneous signatures.

Financially however it actually doesn't seem like a big loss because--as a proportion of their face value-- the cost of printing Re 500 and Re 1000 notes are lower than five and ten rupee ones.

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