ISI's counterfeiting web targets India's Rs 100 notes; Delhi, Hyderabad emerging as major transit points for criminal network
Pakistan's ISI, which produces FICNs to disrupt India's financial system, has made Bangladesh as its main base to supply counterfeit notes.
There has been increasing unease over a counterfeiting threat to an earlier series of Rs 100 notes in the post-demonetisation period.
However, freshly minted Rs 2,000 and Rs 500 Fake Indian Currency Notes (FICNs) detected in the banking channel last year are of low quality, reveals an intelligence analysis.
At least two metropolitan cities — Delhi and Hyderabad — have become centres for disposing of fake currency.
New Delhi: There has been increasing unease over a counterfeiting threat to an earlier series of Rs 100 notes in the post-demonetisation period. However, freshly minted Rs 2,000 and Rs 500 Fake Indian Currency Notes (FICNs) detected in the banking channel last year are of low quality, reveals an intelligence analysis.
While suggesting more sophisticated security features for Rs 100 notes, the Central Economic Intelligence Bureau has asked the Reserve Bank of India (RBI) to adopt more effective anti-counterfeiting measures with the highest security features and texture in printing currency. It has also called for strengthening counterfeit detection systems at banks.
Over 1.13 lakh notes in denominations of Rs 100 were detected in the banking channel during the first six months of 2018, while 12,000 notes of the new Rs 2,000 denomination and 8,000 notes of the Rs 500 denomination were unearthed by banks. Between January and June 2018, a total of 32,000 notes of the Rs 2,000 denomination were seized.
Intelligence sources claimed that counterfeiters, despite using high-quality printers, are finding it difficult to copy security features of the new Rs 500 and Rs 2,000 notes.
Pakistan's ISI, which produces FICNs to disrupt India's financial system, has made Bangladesh as its main base to supply counterfeit notes. An analysis of seized FICNs reveals that the ink and paper used by the ISI is of a high quality. Some recent seizures indicated that fake Indian currency was also printed on cigarette paper.
The intelligence collected so far has identified at least six districts bordering Bangladesh that have become important transit points for circulating fake currency to various cities in the country using cash couriers. Around 88 FIRs in West Bengal and 60 FIRs in Assam have been filed in this regard. Malda, Uttar Dinajpur and Murshidabad in West Bengal; and Dhubri and Barpeta in Assam have turned into hubs for smugglers of fake currency. Among these, Dhurbri and Malda have seen the highest number of such crimes. Since people on both sides of the border are very poor, law enforcement agencies are facing a tough time in convincing them to co-operate in disrupting the smugglers' network.
At least two metropolitan cities — Delhi and Hyderabad — have become centres for disposing of fake currency. The smugglers use couriers, who subsequently transport the fake currency from Delhi and Hyderabad to states like Uttar Pradesh, Punjab, Karnataka, Maharashtra, Chhattisgarh, Gujarat, Rajasthan, Tamil Nadu, Uttarakhand, Odisha, Haryana, Madhya Pradesh, Andhra Pradesh, Telangana and Bihar through the rail network.
The seizure of a huge amount of fake currency from these states indicates that the ISI has become active again after a brief post-demonetisation lull. Intelligence analysis reveals that post-demonetisation, out of the total detected fake currency, 19 percent was deposited in banking channels at New Delhi, followed by 14 percent in Uttar Pradesh. The figures for Maharashtra, Gujarat and Rajasthan were 12.5 percent, 9 percent and 6 percent respectively.
Banks unable to detect fake currency at counter
A huge amount of fake currency is being detected at currency chests of banks and the RBI's regional offices. This clearly indicates that public and private sector banks have no mechanism to check the genuineness of the notes at counters, and fake currency operators are able to push counterfeit notes smoothly into circulation. Intelligence unit said that this may happen since banks scrutinise currency only at the end of the day, and added that the situation is an alarming one.
The Department of Financial Services, which deals with the functioning of banks and financial institutions, suggested that the RBI should take the matter up urgently.
According to intelligence sources, in the post-demonetisation period from November 2016 to March 2018, ICICI Bank reported 1.31 lakh invalid notes of Rs 500 and Rs 1,000 denominations, which accounted for 35 percent of the total detection in bank branches. This was followed by HDFC Bank, Axis Bank and State Bank of India, which reported figures of 12 percent, 9.6 percent and 9.3 percent respectively.
The Financial Intelligence Unit of India, which generates Counterfeit Currency Reports (CCRs) on the basis of information received from banks, had indicated that private banks contribute the majority of such reports, and the compliance levels of public sector banks continue to be low despite the matter having been taken up with the RBI. Public sector banks in 2017-18 had filed 60,768 reports with Financial Intelligence unit, while private banks had submitted 2.52 lakh counterfeit currency reports.
After demonetisation, 43 percent fake currency in Rs 500 and Rs 1000 denomination was unearthed at State Bank of India, while 6.28 was found at Punjab National Bank.
The economic intelligence unit has suggested that banks in semi-urban areas, villages and co-operative banks should be provided with sophisticated fake currency gadgets and to start with, such machines should be installed at all the branches of State Bank of India.
The RBI has been asked to put in place certain mechanisms to prevent fake currency in cash depositing machines. Further, the Ministry of Home Affairs may take up the matter of non-reporting of fake currency by banks with the state police and other enforcement agencies.
Since the ISI manages specialised equipment to print fake Indian currency, banks need to install highly effective sensors and centralised control centres to sort genuine notes from fake ones before they enter the financial system.
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