Lok Sabha Question No. 1772 (UNSTARRED), answered on 2016-11-25
Subject: Fake Currency Notes in Banks/ATMs
Ministry: FINANCE
Asked by: KUNWAR SARVESH  KUMAR, PRAHLAD SINGH PATEL

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO 1772

TO BE ANSWERED ON THE 25th NOVEMBER, 2016/AGRAHAYANA 4, 1938 (SAKA)

## Fake Currency Notes in BanksIATMs

## 1772. SHRI KUNWAR SARVESH KUMAR: SHRI PRAHLAD SINGH PATEL:

Will the Minister of FINANCE be pleased to state:

- (a) whether a large number of cases of circulation %f fake currency notes through banking channelsIATM in the country have come to notice of the Government;
- (b) if so, the details thereof during each of the last three years and the current year;
- (c) whether the Government has made any efforts to identify the source of of fake currency through banking channel A.T.M; entry
- (d) if the details thereof; and SO,
- (e) the corrective measures taken/being taken by the Government to check the circulation of fake currency through banksIATMs in the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

- (a) & (b): Details of detection of counterfeit notes in the banking channel during the last three 2015 and the current year, provided by Reserve Bank of India (RBI), is
- years 2013, 2014, annexed.
- (c) to (e): RBI vide Master Circular dt. July 1,2015 has issued instructions on Detection and Impounding of Counterfeit Notes"

To keep a check on circulation of fake currency, RBI has taken the following steps:

- Incorporating new security features Inew designs in the banknotes to ahead of the counterfeiters is an ongoing process. New security features were added to banknotes in all denominations the year 2005-2006. Government of India, in consultation with RBI; has initiated the process   for introduction of new security features in Indian banknotes. stay during
- 2 RBI regularly conducts  training programmes on detection of counterfeit notes for employees officers of banks and other organisations handling large amount of cash. RBI's website provides information to the public on security features of banknotes. Posters on Know Your Banknotes are also displayed at bank branches. Regional Offices of RBI participate in various awareness programmes where the members of public are made aware of the features of Indian banknotes and ways to identify genuine Indian banknotes. etc. are also distributed in such

awareness programmes. The contents pertaining to awareness on Indian banknotes are available in WWW paisaboltahai rbi org in:

- 3\_ Instructions have been issued by RBI to banks that banknotes in denominations of ? 100/- and above should be re-issued by banks over their counters or through ATMs only if these banknotes are duly checked for authenticitylgenuineness and fitness by machines. The banks should re-align their cash management in such a manner s0 as to ensure that cash receipts in denomination of < 100 and above are not into recirculation without the notes being machine processed for authenticity. A directive in this regard under Section 35A of Banking Regulation Act, 1949 has also been issued to all scheduled banks. In order to obviate complaints regarding receipt of counterfeit notes through ATMs and to curb circulation of counterfeit notes, it is imperative for banks to in place adequate safeguardslchecks before loading ATMs with notes. Dispensation of counterfeit notes through the ATMs would be construed as an attempt to circulate the counterfeit notes by the bank concerned: The responsibility of ensuring the quality and genuineness of cash loaded at White Label ATMs is that of Sponsor put put
- 4 The process of reporting and detection of counterfeit notes, by banks, has also been rationalized in order to safeguard the interests of common man, coming across such counterfeit notes unknowingly and bringing in improvement in reporting: Under the revised procedure , all cases of detection of counterfeit notes at the bank branches treasuries are required to be promptly reported to Police Authorities in the following manner:
- For cases of detection of counterfeit notes upto 4 pieces, in a single transaction, a consolidated report as per the format prescribed should be sent to the police authorities at the end of the month.
- For cases of   detection of counterfeit notes of 5 or in a single transaction, FIRs should be lodged with the Nodal Police Station / Police Authorities as per jurisdiction.
- In order to train bank staff engaged in cash handling on features of Indian banknotes, RBI has advised Indian Banks Association to ensure, in consultation with the banks, that all bank personnel handling cash are trained on features of genuine Indian bank and training materials.
- The banks have been advised by RBI that wherever counterfeit notes are detected but not impounded and reported, it will be construed as willful involvement of the bank concerned in circulating counterfeit notes and may attract penal measures.
- 7 RBI has issued banknotes, in all denominations in Mahatma Gandhi Series 2005, with a new numbering pattern. Now the numerals in both the number panels f these banknotes are in ascending size from left to right, while the first three alphanumeric characters (prefix) remain constant in size. Printing the numerals in ascending size is a visible security feature in the banknotes so that the general public can easily distinguish a counterfeit note from a genuine one
- 8 Government of India in consultation with RBl has withdrawn legal tender character of banknotes in the denomination of < 500 and < 1000 issued till November 8,2016, inter alia, to reduce the incidence of Fake Indian currency Notes. RBI has issued < 500 and < 2000 denomination banknotes in Mahatma Gandhi (New) Series.

## Annexure

|                                                       | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   | Calendar Yearwise data of detction of FICN in _the Banking Channel   |
|-------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|
|                                                       | Rs 5                                                                 | Rs 10                                                                | Rs 20                                                                | Rs 50                                                                | Rs 100                                                               | Rs 500                                                               | Rs 1000                                                              | Total                                                                |
| Total Pieces detected during the year 2013            |                                                                      | 225                                                                  | 189                                                                  | 7,205                                                                | 113,241                                                              | 255,878                                                              | 104,931                                                              | 481,670                                                              |
| Notional Value Rs:                                    | 5                                                                    | 2,250                                                                | 3,780                                                                | 360,250                                                              | 11,324,100                                                           | 127,939,000                                                          | 104,931,000                                                          | 244,560,385                                                          |
| Total Pieces detected during the year 2014            |                                                                      | 302                                                                  | 125                                                                  | 6,485                                                                | 162,800                                                              | 273,989                                                              | 129,212                                                              | 572,913                                                              |
| Notional Value Rs.                                    |                                                                      | 3,020                                                                | 2,500                                                                | 324,250                                                              | 16,280,000                                                           | 136,994,500                                                          | 129,212,000                                                          | 282,816,270                                                          |
| Total Pieces detected during the year 2015            | 2                                                                    | 121                                                                  |                                                                      | 38,917                                                               | 156,347                                                              | 193,334                                                              | 168,935                                                              | 617,108                                                              |
| Notional Value Rs.                                    | 10                                                                   | 1,210                                                                | 1,189,040                                                            | 1,945,850                                                            | 15,634,700                                                           | 96,667,000                                                           | 168,935,000                                                          | 284,372,810                                                          |
| Total Pieces detected during Half Year ended Jun 2016 |                                                                      | 107                                                                  | 76                                                                   | 3,281                                                                | 109,751                                                              | 133,252                                                              | 71,986                                                               | 318,453                                                              |
| Notional value Rs.                                    |                                                                      | 1,070                                                                | 1,520                                                                | 164,050                                                              | 10,975,100                                                           | 66,626,000                                                           | 71,986,000                                                           | 149,753,740                                                          |