Currency Counterfeiting

1
Currency Counterfeiting

• Issues and
• Strategies

2
1945-46 23,790 counterfeits valued at Rs.1,21,
534 out of which 12,306 notes were of Re.1

• With the increase in the notes in circulation the
  number of counterfeit banknotes detected have
  gradually increased over the years.
• Counterfeit banknotes detected during the last
  five years (April-March)
• Introduction of CVPS in the currency chests
  during 2002 has led to large detection of
  counterfeit banknotes until then the same was
  manually detected.
• The RBI has now in place 54 CVPS and 28 SBS at
  its 19 Offices.
• The data given alongside are exclusive of the
  counterfeit banknotes seized by police and other
  enforcement agencies.

2002-03 2,13,864 (3.56)
2003-04 2,05,226 (2.76)
2004-05 1,81,928 (2.44)
2005-06 1,23,917 (1.77)
2006-07 1,04,743 (2.32)
3
Average number 10,000 pieces during 40s

• After 80s the counterfeits witnessed to 40,000 to
  50,000 per year. The quality of counterfeits was
  quite good. Our notes generally have security
  features like watermark, embedded security thread
  and intaglio printing only on Rs.100
  denomination.

4
Mahatma Gandhi Series

• In 1996, the issue of new design banknotes in
  Mahatma Gandhi series with latest security
  features.
• The long gap for issues of this is mainly because
  of procurement of modern machinery for Government
  Printing Presses and setting up of BRBNMPL

5
Withdrawal of Ashoka Pillar Watermark Rs.500

• In 1997 Bank initiated action to phase out 1987
  series of Rs.500 denomination from circulation.
  Over 1000 counterfeit banknotes of Rs.500
  denomination were seized by the Police and they
  revealed that these notes were smuggled into the
  country. All the security features except
  intaglio printing and latent image were
  successfully imitated. Hence the Bank widely
  publicised the security features of Rs.500
  denomination to enable people to identify the
  counterfeit banknotes.

6
Counterfeits of Mahatma Gandhi series notes of
Rs.500 and Rs.100

• By the year 1999, even the newly designed Mahatma
  Gandhi series were counterfeited and started
  flooding in the market. Except for the poor
  quality of paper, devoid of intaglio printing,
  windowed security thread and latent image the
  counterfeiters posed a challenge to the
  authorities including the Bank.

7
Education Campaign

• The Bank therefore launched a massive education
  campaign in the print and electronic media on the
  security features of Rs.500 notes.
• The Bank also added a new security feature viz.
  Optically Variable Ink (OVI) in the numeral of
  500 of Rs.500 notes
• These notes were issued in circulation from
  November 2000.

8
High Level Committee Gaikwad Committee
February 2000

• This Committee recommended several measures
  including incorporation of additional security
  features to counter the counterfeiting menace.
• The major revision in the design of all the
  denomination of banknotes was introduced in the
  year 2005-06. These include (a) demetallised,
  magnetic and machine readable windowed security
  thread with a colour shift from green to blue in
  Rs.100, Rs.500 and Rs.1000 denominations (b)
  improved intaglio printing (c) improved
  see-through feature incorporating the
  denominational numeral instead of the floral
  design and (d) electrotype watermark featuring
  the denominational numeral alongside Mahatma
  Gandhi portrait in the watermark window.
• Presently, with the advent of high quality of
  reprographic and computer technology,
  counterfeiters have been successful in matching
  the quality of genuine banknotes to a large
  extent.

9
National Security Council Secretariat

• The Government of India constituted a Special
  Task Force in the National Security Council
  Secretariat and also established that the Fake
  Indian Currency Notes were printed in the
  neighbouring countries and are being smuggled
  into the country from all directions.

10
Strategies

• The Security Features in banknotes are reviewed
  and upgraded from time to time with the approval
  of Government of India.
• Reserve Bank has issued instructions to all banks
  to constitute Forged Note Vigilance Cells at
  their Head Office with a Nodal Officer to
• a. Monitor and implement RBI instructions in this
  regard
• b. Compile data on detection of counterfeit
  banknotes
• c. Follow-up counterfeit banknote cases with
  investigation agencies
• RBI issued instructions to all banks to put in
  place proper systems to ensure that counterfeit
  banknotes are not dispensed or disbursed through
  any means including ATMs
• Publicity Campaigns are held by our Issue Offices
  for the benefit of Police Authorities, banks,
  utility organizations handling large value of
  cash.
• Banks have been advised to install Ultra Violet
  Lamps and Note Sorting Machines at their
  branches.

11
Nodal Officers Appointed by CBI

• The matter with regard to currency counterfeiting
  was referred to Central Bureau of Investigation,
  Ministry of Home Affairs, Government of India who
  have forwarded the list of Nodal Officers of each
  State to tackle the difficulties faced by each
  Office/bank in filing of FIR on detection of
  counterfeit banknote.

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RBI - Measures

• While RBI has been taking the requisite steps to
  attack the menace of counterfeiting the problem,
  the same cannot be tackled without the active
  support of law enforcing agencies. The proactive
  and sustained measures taken together against
  counterfeiting can eradicate the problem from its
  roots. The introduction of new/additional
  security features in all denominations during the
  year 2005-06 as well as introduction of star
  series Banknotes in the denomination of Rs.10,
  Rs.20 and Rs.50 during the year 2006-07 will
  maintain confidence of the public in the
  Banknotes.

13
Law

• Criminal Penal Code Section 154
• Indian Penal Code Section 289 A to E
• Thank you!