NEWS & ADVICE : FIXED DEPOSITS
Technical reforms to curb fake currency menace - RBI
By Neelima Shankar
Aug 13, 2009
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The high-level committee led by RBI deputy governor Usha Thorat, has suggested that the banks must out in place an in-built currency checking mechanism at all ATMs.

Accordingly, banks must adopt ‘cassette swap' system to feed notes in ATMs to minimize manual involvement in currency handling at the ATMs and cash dispensing machines. Banks must also periodically audit the ATMs and processes of the companies to which their ATM services are outsourced.

The committee has suggested a similar mechanism for note sorting machines and desktop sorters at all bank counters. The performance parameters for these detectors must be standardised, the committee emphasised.

The committee has come up with a slew of other suggestive measures to cub infiltration and propagation of fake currency in the system like progressive adoption of state-of-art technology in the financial system and regular upgrading of security features of bank notes.

The committee also pointed that RBI must ensure old series must be withdrawn from circulation as per the policy.

The committee stated that the current rule which requires a person to compulsorily file an FIR on receiving up to five fake currency notes must be repealed- ‘‘A simple report may be filed with the branch which in turn may include this in the counterfeit currency report to RBI,'' the committee suggested.

The committee also stressed on mass awareness on detection of fake currency and on information sharing with law enforcing agencies.

In August 2008, RBI constituted a committee to suggest measures for enhancing the existing currency systems, after a cache of about 75,000 fake notes worth Rs 4.02 crore were recovered from the currency chest of SBI Domariaganj branch in Uttar Pradesh by UP Special Task Force.

Recently, fake currency notes were received by Shegaon branch of SBI.

SBI has set up a Currency Administration Branch (CAB), known as a ‘cash factory' in Lucknow, to exclusively handle the currency notes.

The recommendations from the committee came after five rounds of meeting between September 2008 and May 2009.

Though the menace of fake currency in the system has been rising, the number of fake notes in India is estimated to be in range of 3-6 pieces per million which is one of the lowest in the world, as noted by the committee.

 


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