The recent recovery of fake money worth around Rs 1.62 crore from the currency chest in State Bank of India’s Dumariyaganj branch, Uttar Pradesh, is a matter of serious concern. It is serious because this scandal got unearthed inside the country’s largest public sector bank. It ought to be seen as a warning signal to put in place effective fool-proof measures to prevent recurrence of such instances.

The quantum of seizure undoubtedly is significant. But was it tax enforcement of established norms or connivance or negligence of other officers that facilitated fake currency circulation? Considering the fine printing as also the high quality currency paper reportedly used to print the fake currency notes and the serial numbers on the money lying in currency chest matching with genuine notes, was it a well-knit organized gang at work? The ongoing probe is expected to establish the truth.

Currency counterfeiting, an organized white-collar crime, has assumed serious proportions. The cause for concern is that when fake currency gets passed on to unsuspecting individuals, businesses and financial establishments, it undermines the economy. With parallel currency, the victims who suffer the most harm are individuals who may receive such counterfeit currency. Besides undermining confidence in the payment system and making the public uncertain about accepting cash for transactions, such fakes currency also reduce the value of genuine ones and facilitate in increasing the prices of essential goods.

In developed countries like the US a decade ago, just one percent of the counterfeit currency was produced on digital equipment, but currently 56 percent is stated to be made that way. Most of the security features including complex designs, special paper, watermarks, optical fibre, security thread, micro-printing etc., in genuine notes seem to get copied, thanks to advanced computer technology that provides the sophistication and perfection. Seizure of high quality scanners, copiers and printers along with fake currency indicates that production of counterfeit notes in the country seems to have got hi-tech.

Scheduled commercial banks, provided with currency chest facility, are authorized to issue fresh bank notes/coins including exchange of mutilated ones. Concerned over complaints of supply of counterfeit bank notes at some ATMs, the RBI has made it mandatory for all currency chest branches to be equipped with verification processing/sorting machines and every bank install ultra-violet lamps to detect the fake currency. But can a bank be held accountable if it tenders a customer fake currency?  In the US, counterfeiting currency can invite punishment up to 15 years in prison as well as seizure of the property used in the creation of such fakes. Offenders in Europe can face a jail term up to 4 years plus fines. In Canada, even possessing a counterfeit note can mean a 14-year prison life. Compared to China, where anyone convicted for counterfeiting currency can be sentenced to life imprisonment including execution, in India, possession of forged or counterfeit currency notes is punishable of varying degrees and up to life imprisonment under the Indian Penal Code sections 489 A. With racketeers reportedly circulating fake currency notes deploying well-knit gangs through airports in major cities as also across porous borders, the government has plans to set up a nodal cell in every all state to deal with the circulation of fake Indian currency notes and organized crime.