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A threat from within
Written By psaram42 - 31 July, 2009
Bangalore rbi Citizen Reports Economy Banking Others currency
At the Indiranagar petrol bunk 8AC and 2 QA series notes of 1000 denominations are not being accepted, Since 10 July 2009. The banks should take some responsibility in guaranteeing at least the ATMs being free of fake notes. The total amount of estimated fake currency is alarming.
“Fake currency is everywhere: in banks, in ATMs, and in our hands. The RBI and other authorities have had limited success so far in controlling their spread. The Naik Committee, set up to assess the menace of fake currency, says counterfeit money worth in the range of Rs 1,69,000 crore is sloshing around the system. And just a tiny fraction of it has been seized: Rs 63 crore.”
Full report in To days TOISome of the questions which arise are
- What is the real manifestation of the apparent threat on countries economy in general?
- Will RBI be able to deal effectively the present situation?
- How are these estimates of the extent of fake currency (169000 crore) are arrived at?
COMMENTS
idontspam - 31 July, 2009 - 19:49
@blrpraj, Fake note detectors are available. They are usually country specific customizations done. They need to be retrofitted into ATM's. It would be cheaper to check the notes before they go into the ATM during the cash handling process. I dont think we have too many deposit machines which will need the retrofitting. There is a fundamental problem if Banks cannot hold clean money regardless of how much is circulating in the market. It is criminal they are allowing unclean money to get through their windows.
@PSA, very good points raised. This is a major financial risk and there is a situation now that needs to be tackled. These fakes are obviously better than any before and beating current detectors in the market. I am not sure how the value is being determined, this would give the impression RBI & others know enough to be able to stop this.
example of a full function ATM with counterfeit detection tech.
blrpraj - 31 July, 2009 - 19:57
http://www.atmmarketplace.com/article.php?id=11157&prc=10&page=61
In my opinion, regardless of the costs involved the RBI must make it mandatory for ALL ATMs in the country to have counterfeit detection technology. The costs of not having the technology are just too much. With this we can eliminate one inadvertent source of counterfeit money..the bank itself :-)
ATM technology to detect fake notes
blrpraj - 31 July, 2009 - 19:29
I suppose state of the art technology must be available that can be installed in ATMs to detect fake notes before dispensing the money OR much better if the notes can be authenticated prior to loading into the ATM.
Does anybody know what would be involved in installing such a technology in the ATMs and what would the costs be? I think the cost factor should not be considered as a in issue since it will be far cheaper than the financial damage being caused to the economy due to the circulation of fake notes.
idontspam - 31 July, 2009 - 20:14
@blrpraj, How is the money getting into the ATM before it is dispensed? What are the touch points there that can use with some detectors? Retrofitting ATM's with a detetector cartridge involves changes in rearranging the carousels in the vault. This is a hardware change requiring possibly new machines completely if the new detectors dont fit in the current routing. Anyways identifying all other touchpoints before the money goes into the dispensing machine is a key aspect before trying to fix the machine. But your point is completely valid in case of deposit machines where the deposit is the first touch point in accepting the cash before the depositor dissappears.
I would add that the law needs to hold the banks responsible for any counterfiet money dispensed regardless of how the bank chooses to implement the checking. RIght now the banks are not even liable to replace the fake note if the customer has got it even from the banks own systems.
abidpqa - 1 August, 2009 - 06:18
The police also should stop considering the reporter as the first suspect.
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