Exclusive Coverage: Agencies Cracks Down On Fake Bank Notes After Govt Fail To Track Counterfeit Currency

A huge cache of counterfeit currency, being pumped into India from Pakistan, is going undetected. In an assessment of the past four years, the Intelligence Bureau (IB) has concluded that less than 1 per cent of fake Indian currency in circulation has been seized. 

The sharp dip in seizures -- from 2 per cent in 2010 to less than 1 per cent -- has alarmed the Government, prompting it to come out with new security features for bank notes that will make counterfeiting difficult. Of the eight new security features that have been decided upon, one has already been implemented, sources told INNLIVE.

The font of the alpha numeric and the numbering panel has been raised. The need for new features was felt after the IB submitted a report to the Government after reviewing fake currency trends between 2010 and 2014.
The report, sent to the home and finance ministries, stated that fake currency seizures have drastically come down. 

The assessment was made after the FICN Coordination Centre under the IB, comprising agencies like the Directorate of Revenue Intelligence, Central Bureau of Investigation, National Investigation Agency (NIA) and representatives for police in states, shared information and scrutinised data regarding Fake Indian Currency Notes (FICN). 

“While the circulation rate of fake currency has not dramatically increased, the low seizure rate is an alarming trend,” an IB official said, quoting the report on fake currency. 

In 2010, Rs 1,600 crore of fake currency was assessed to be in circulation, which was about 0.2 per cent of the total printed currency worth Rs 8 lakh crore.

As of now, the total Indian currency in the market is around Rs 16 lakh crore but the circulation of fake notes still hovers around 0.1-0.2 per cent. 

“The most alarming aspect is that fakes have become strikingly similar to the real ones. The security features have been matched by fake currency syndicates. There is no other option but to change the security features so these cannot be matched,” the official added. 

Sources said this assessment shows that the circulation of fake currency is definitely over Rs 2,000 crore at any given time. 

Despite the high circulation, fake currency worth only Rs 136.43 crore was seized from across the country in the past three years. 

Intelligence officials combating the fake currency menace call it ‘economic terror’ by Pakistan. The reason attributed to the low seizures is that syndicates have become more tech savvy, using encrypted communication through mobile applications that cannot be detected in real time. 

“In the past, they would speak on phones which made surveillance easier and allowed us to act swiftly. It allowed us to get exact details, which made detection easier,” an intelligence official said. 

New routes for circulating counterfeit Indian currency have also alarmed Indian intelligence agencies. The inflow of fake notes is not limited to smuggling from the border areas of Pakistan, Bangladesh and Nepal.

Countries like Malaysia, Thailand and Oman have emerged as the new centres that are being used for stocking Indian fake currency and then circulating it throughout India. 

The new modus operandi adopted by Pakistan-controlled syndicates makes detection of fake notes difficult. Instead of smuggling in huge quantities through neighbouring countries, individuals are bringing into India smaller amounts by air travel. 

Replying to a question in the Rajya Sabha last week on the fake currency menace, Minister of State for Finance Jayant Sinha said that in order to stay ahead of the counterfeiters, the Government has recently introduced a revised numbering pattern in all denominations. 

He added that the Government, in consultation with the Reserve Bank of India (RBI), has initiated the process of procurement of upgraded/new security features for a fresh series of bank notes. Sinha informed that an FICN Coordination Group has been formed in the Ministry of Home Affairs to share intelligence/information amongst various security agencies to deal with the menace of circulation of fake notes in the country. While investigating a case of fake currency, the NIA had in 2013 established a link between Pakistan and terror groups in Jammu & Kashmir. 

The agency said the fake currency was being used to fund terror activities in India. The probe also revealed the role of J&K-based terror group Hizbul Mujahideen in circulating fake currency in India.