Banking channels hit by counterfeit notes

BANGALORE: Despite new security protocols adopted by the RBI and stringent measures taken by public sector banks (PSBs), counterfeit notes continue to be pushed through “banking channels” via

Published: 14th April 2012 02:24 AM  |   Last Updated: 16th May 2012 07:30 PM   |  A+A-

BANGALORE: Despite new security protocols adopted by the RBI and stringent measures taken by public sector banks (PSBs), counterfeit notes continue to be pushed through “banking channels” via innocent customers and hawala operators on a day-to-day basis.

Many bankers say, “The volume of transactions is so huge that it is not possible to detect every fake Indian currency note (FICN) that is circulated by conduits surreptitiously either sandwiched between bulk deposits or in the ATMs.”

According to RBI Annual Reports, the number  of detection of FICNs has increased from 1,04,743 pieces detected in 2006 to 4,35,607 pieces in 2011. “With 90 per cent detection, it shows there is a high level of awareness among bank employees,” the report claims.

A bank manager says, “It is not possible to detect FICNs when bulk amounts are deposited during rush hours. But, when this cash is deposited in the currency chest and FICNs are detected, it becomes the cashier’s responsibility to replace the amount.”

“Even if one fake note of 500 rupee denomination is found in the currency chest, the RBI imposes a fine of Rs 5,000,” claims a bank officer. Although it is compulsory for banks to register a complaint when five or more FICNs are detected in a single transaction, neither an FIR is lodged nor the RBI informed, as FICNs are destroyed at source.

“All people, including the customer, avoid filing an FIR,” admits a bank manager.

But, there have been instances when the banks have “allowed” FICNs to be circulated either through issue counters or through the ATMs or even through remittances to the RBI issue offices. In fact, the RBI has lodged FIRs against PSBs in Delhi, Bangalore, Muzzafarnagar and Meerut when some banks have made remittances containing FICNs to the apex bank.

Revenue Intelligence sources told Express that the incidents of counterfeit notes passing through the ATMs had seen a rise. “The more the circulation of money, the more will be the FICNs, as even today credit card transactions in India are minimal compared to the US and Europe,” enforcement agencies add.

Most of the PSBs have reputed “private agencies” who provide specialised service offerings for ATM owner banks including cash replacement. Only crisp and unsoiled “ATM fit” notes are handed to these agencies by the banks.

“There is a possibility that these ‘outsourcing agencies’ may be introducing FICNs after the vehicles leave the bank premises,” says a cashier.

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