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Combating the fake currency mece

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  18 Aug 2015 12:00 AM GMT

The open border of the country with Bangladesh continues to be riddled with many crimil activities, the ubated smuggling of counterfeit Indian currency being one of the most serious. In just two months of March-April this year, customs officials seized fake currency with face value of more than Rs 9 lakh in the State. The BSF last month busted a fake Indian currency notes (FICN) racket at Malda in West Bengal, seizing fake notes with nearly Rs 48 lakh face value at different places in that district alone. BSF sources have revealed that the Malda gang was smuggling fake notes from Bangladesh through the border, using poor youths of bordering villages to do the job. In particular, Malda and Mankachar in Dhubri district of Assam have been identified as two major entry points of fake currency from Bangladesh. Fake notes of Rs 500 and Rs 1,000 denomitions have been regularly turning up in different towns in Assam, even in bank ATMs. There are reports that cows and various goods smuggled from Assam to Bangladesh are paid for in considerable part with fake Indian currency, which is then circulated back here. The fake currencies are of such high quality that these show up only under UV light or in cash checking machines. Even Delhi police has been befuddled at how closely these fake notes are beginning to resemble genuine currency. As many as five security features in Indian currency have been compromised. The quality of paper and its stiffness, security thread in the right half, watermark, optical variable ink and identification mark on the left of fake notes now look and feel almost similar to real ones.

Indian intelligence agencies have long maintained that such notes can be printed only with regular currency-making machines, which only a sovereign country can possess. Forensic alysis at different times have revealed that the paper, ink and other features in seized fake notes matched with Pakistani legal tender. With the finger of suspicion pointing to the neighbouring country, the circulation of FICN is being primarily investigated by the tiol Investigation Agency (NIA). This is because fake currency can not only undermine the country’s economy, it can also be used to fund terror activities. In fact, an NIA probe two years back unearthed the role of J&K-based terror group Hizbul Mujahideen in circulating fake notes in the country. Pakistan’s Inter Services Intelligence (ISI) has long been known to smuggle fake Indian currency primarily through Bangladesh and Nepal. But now Pakistani syndicates are reportedly casting their nets wider, stocking fake notes in countries like Sri Lanka, Malaysia, Thailand, Singapore, UAE and Oman, and then smuggling it in small quantities through couriers into India. Keeping pace with hi-tech counterfeiters, the smugglers too are said to be getting smarter, using encrypted communication through mobile phone apps that cannot be traced in real time. This is the reason why seizure rates of fake currency remains low in the country, though intelligence agencies claim that the amount and rate of circulation of fake notes have not increased sharply.

So how much fake Indian currency are in circulation in the country? What is the amount of FICN being injected into the system every year? The estimates vary widely, though it is believed that if the total Indian currency in circulation is around Rs 16 lakh crore, the proportion of fake notes is about 0.1-0.2 per cent. Based on Intelligence Bureau (IB) inputs, the Central government had earlier estimated that Rs 1,500-5,000 crore in counterfeit currency was in circulation in the country at any given time. In December last year though, the Central government admitted in Parliament that no reliable estimate of fake currency was available. Since then the position has improved somewhat, with the NIA commissioned Indian Statistical Institute (ISI) study pegging the quantum of counterfeit notes in circulation at a much lower level at Rs 400 crore. It has also estimated that Rs 70 crore FICN is entering the Indian economy every year. Every year, fake currency of value Rs 15-25 crore are seized countrywide, so it is clear that the Indian law enforcement agencies are lagging behind in this battle. What comes through clearly in the NIA-ISI study is that the RBI, CBI, IB, Directorate of Revenue Intelligence, Central Economic Intelligence Bureau (CEIB), Research and Alysis Wing (RAW), tiol Crime Records Bureau (NCRB) and state police forces need to raise their coordition to a much higher level if the circulation of fake notes is to be tackled effectively. As for staying ahead of counterfeiters, the Central government reassured Parliament last month that a revised numbering pattern has been introduced in all currency denomitions. This will form a part of eight new security features to be incorporated in our currency notes soon. More significantly, an FICN coordition group has been formed in the ministry of Home Affairs to share intelligence amongst various security agencies to deal with the mece of circulation of fake notes in the country.

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