As per the data shared by the government in Parliament, only 1.57 lakh fake currency notes with a value of 11.23 crore rupees were detected in the country between November 2016 and July 2017. This is much less a number compared to the previous years.
On November 8th, 2016, the Prime Minister Narendra Modi announced demonetization of the old Rs 500 and Rs 1000 notes. During his address to the nation, he mentioned the issue of fake currency multiple times and how demonetization was aimed at fighting fake currency among other things.
Even the Finance ministry in its press release on the same day spoke about the menace of fake currency and demonetization as a step to counter the same.
But more than eight months after demonetization, the government does not seem to have detected a large volume of fake currency notes if one goes by the information shared by the government in the Lok Sabha and the Rajya Sabha on the issue of fake currency.
Who can impound fake currency?
The Reserve Bank of India (RBI) has issued instructions on multiple occasions on the process to be followed when fake currency is detected by the banks. The following authorities can impound counterfeit notes.
- All Banks
- All Treasuries and Sub-Treasuries
- Issue Offices of Reserve Bank of India
All notes received over the counter or directly at the back office will be examined for authenticity through machines. RBI's instructions make it clear that no credit will be given to the customer's account if such notes are received from the customer. The instructions also make it clear that such notes should not be returned to the customer and also cannot be destroyed by the bank. Banks and other authorities have to mandatorily impound counterfeit notes detected by them. Failure to do so will also make them liable for penalty.
What happens to the impounded fake currency?
Whenever a currency note is found to be fake or counterfeit, an acknowledgement receipt in the following format should be issued to the person who tendered those notes.
In cases where up to 4 pieces of counterfeit notes are detected in a single transaction, a consolidated report in the following format should be sent by the Nodal Bank Officer to the police authorities along with the counterfeit notes, at the end of every month.
In cases where 5 or more pieces of counterfeit notes are detected in a single transaction, the counterfeit notes should be forwarded by the Nodal Bank Officer to the local police authorities in the following format.
Every month, a consolidated report / FIR should be sent by the Police to the Forged Note Vigilance Cell at the Head Office of each bank.
Not a large volume of fake currency detected post demonetization
In response to a question in the Lok Sabha, the government mentioned that according to the data available with NCRB, a total of 1,57,818 Fake Indian Currency Notes (FICN) having a face-value of Rs.11,24,04,980 have been reported by States/UTs Police for the period between 09th November 2016 and 14th July 2017.
In response to a similar question in the Rajya Sabha, the government mentioned that according to the information available with the NCRB, a total of 1,57,797 Fake Indian Currency Notes (FICN), having a face-value of Rs.11,23,62,980 have been detected in 29 states post demonetisation until 14th July 2017.
In response to another question in the Rajya Sabha, the government mentioned that a total of 89,691 Fake Indian Currency Notes (FICN) of Rs. 1000 and Rs. 500, having a face-value of Rs. 6,86,95,500 have been reported by States/UTs Police in the year 2017 till 30th June 2017. In other words, fake currency with a face value of only about Rs 4.36 crore was detected in the two months following demonetization (November & December of 2016). Compared to the value of demonetized currency, the amount of fake currency detected is minuscule.
How does this compare with previous years?
Compared to the previous years, fewer number of counterfeit notes were detected in the 8 months after demonetization. In 2014-15, a total of 5.94 lakh counterfeit notes were detected as per RBI's annual report. In 2015-16, this number went up to 6.32 lakh. But in the 8-month period between 09th November 2016 and 14th July 2017, only 1.57 lakh counterfeit notes were detected.
|Year||Number of Rs 500 counterfeit notes detected||Number of Rs 1000 counterfeit notes detected||Total Number of counterfeit notes detected||Counterfeit notes as a proportion of notes in circulation|
|09th November 2016 to 14th July 2017||NA||NA||157818||NA|
This post first appeared here.