COMMENTS

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 :-)

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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.

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@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.

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@idontspam

I agree. Money before loading into the ATM must be authenticated. Basically, both, the input and output of currency into the banking system needs to be authenticated. That way we can ensure a sterile closed loop and minimize the banking system itself from becoming a repository of some of the counterfeit money. Basically, the human aspect of detecting counterfeit money in the banking system must be turned over to machines. The following must be done as part of the counterfeit detection

- all cash deposits must be run through counterfeit detecting machines. Only then will we get a handle on how much counterfeit money is really making it into the banking system

- all currency prior to loading into an ATM must be run through ccounterfeit detectors,  prefereably by the ATM itself before it ingests the money being loaded.

- if the counterfeit detection in the previous step is not done by the ATM itself (while loading the money) and is in fact being done in a different location then the ATM should at least disburse the money after running it through the counterfeit detector. This would be to plug the gap and minimize introduction of counterfeit money in the journey to the ATM machine prior to being loaded.

You may ask why these multiple steps. Corruption..like it exists in many industries may exist within the banking industry as well. I am not saying that it does..but even if it exists, it would be difficult to know if somebody is swapping good money with bad money since there is no traceability. At least, with these automated checks of inputs and outputs we will easily come to know if there is some mischief going on in the banking industry. If there is output of bad money without any inputs of bad money then we will know for certain where the bad money got into the system and perhaps how.

The banks have one hell of an explaining to do how they came into possesion of counterfeit money and how it is being dispensed via ATMs.

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@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.

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