The very serious business of funny money-II

Welcome to the real convoluted world of counterfeit currency in India, where the victim is prosecuted, the fence eats the crop, and the criminals walk free. This is the second part of a three-part series

Here are a few anecdotes that illustrate how tortuous the system has become as far as counterfeit currency in the country is concerned.

1) A first-generation entrepreneur chucks up a great career and is running a small eco-resort in a remote tribal area. Over the decades, the area becomes popular, and soon developers move in next door. Attempts are made to muscle in on his property, and he is being forced to shut down and sell out, advice given by others including yours truly is for him to do so. Things go from bad to worse, his wife leaves him in fear and relocates to his hometown with the children, but he continues fighting the system. One day, off to his bank to deposit cash collected, he is found with three or four counterfeit notes. The bank manager advises him to tear them up, but our friend wants to be a good citizen, and insists that the relevant RBI advisory-based FIR is filed. His enemies, of whom he has quite a few by now, come to learn about this — and now he is in all sorts of trouble.

2) While researching automobiles at fuel-filling stations where the attendants have seen me for decades and have some level of confidence in me, I come to learn that they end up dealing with and then refusing fake currency notes at least two-three times per attendant per shift. This is up from about two-three times per shift for the whole filling station a few years ago, and maybe once a day 10-15 years ago. Despite this, and having counting-cum-detecting machines installed, cashiers find a few counterfeit currency notes in their bundles when re-checked at the banks almost every day. These currency notes are the best of the counterfeits, are returned by the bank to the customers, and then passed on back into the system by using them to pay off suppliers paid in cash. The situation is apparently even worse at liquor shops.

3) At a conference pertaining to cash management and payment processing, a person from the railways who I get friendly with (I grew up in a railway town and am passionate about trains, and know quite a bit about the railways as well as their cash-management systems) lets drop a nugget — they have trunks full of counterfeit currency notes which they do not know what to do with. Probably no other wing of the Indian government collects as much cash as does the Indian Railways. And the problem, which at one stage used to be restricted largely to the border and coastal areas, is now almost nationwide. The Indian Railways, incidentally, is amongst the fastest in adopting non-cash transaction systems. And monsoons as well as other natural calamities are a good way of declaring currency damaged and destroyed.

4) A recent phenomenon is the surfacing of counterfeit notes from ATM dispensers, and the refusal of the concerned banks as well as authorities to do anything about it, leaving the customer eventually with a loss. This is an activity that is extremely suspect, as “stuffing” of ATM cartridges is supposed to be an intensely-controlled and monitored activity, one that this correspondent is familiar with. There is no way counterfeit currency notes can be delivered through ATMs unless there is internal complicity of a very high nature, and complaints of this sort should be escalated to the highest in the relevant bank as well as the RBI, without any issue of the suspect bank/branch being permitted to interfere on any grounds whatsoever. As mentioned before, the rules regarding compulsory 100% scanning and verification of currency notes dispensed, do not come into play till March 2011.

All this, however, still does not answer the basic question — what is the man on the street supposed to do when saddled with a fake currency note? Destroying, holding on to, or transporting a fake currency note is a crime in itself. The only option is to surrender it to the authorities. But which one?

A few more points on my experience with this subject:

1) To try and go to the local RBI office, as this correspondent did one fine sunny day in Delhi, to try and find out, was like committing suicide. A polite and helpful elderly guard at the entrance, when told about my mission, took me to one side and said that even entering the RBI premises with a fake note was a crime and that he would have to detain me till the local police came to take me away. So it was better if I did not visit the RBI.

2) The bank is obliged to lodge an FIR with the local police, which in itself is not an issue if you have the wherewithal to handle the subsequent eventualities, but the stated format of the report to be filed with the local police is enough to place you as the customer at the centre of the investigation. Even if that is not a problem and you wish to be an honest citizen, fact remains, you have lost the value of the counterfeit currency for sure. And the bank as well as the RBI, instead of supporting you legally for what you may perceive as having done your duty, will expect you to fight the legal battle on your own. This is also seized upon as a great opportunity by your enemies to put you into even more trouble.

3) The local police are always keen to catch people in the business of counterfeit currency. Sadly, any victim will do, and local traders dealing in cash are extremely susceptible to this. Besides, it makes for great headlines, and anybody caught, howsoever innocently, is immediately a social outcast.

4) Sending currency notes by uninsured post is also illegal. So the option of sending a fake or counterfeit currency note by post to the Financial Investigation Unit in Delhi, which is one more entity dealing with this issue, may not really be correct. In any case, as of now, they do not accept complaints from the general public.

There is a Parliamentary ‘House Panel Committee on Counterfeit Currency’. Not much is known about what they do, but yes, a few months ago, they expressed shock at the government's decision to outsource the printing of currency notes to the USA, UK & Germany. So maybe you could write to your elected representative on the subject. Maybe not, too.

A few decades ago, statistics on satisfaction levels of meals on trains and telephone users were calculated based on the actual complaints received. Needless to say, the number of complaints received was very low, so it was presumed that the satisfaction level was very high.

Likewise, the authorities would have us believe that the amount of counterfeit currency in circulation is very low, and one reason is because the number of complaints are very low — ignoring the fact that if citizens complain about counterfeit currency, they go straight to jail.

(The third part of this series will appear on Monday, 19th July).

1 decade ago
is there any ciation form suprene court for accused found with single fake currency note.

police have loggegd a chartsheet of IPC 498b against my father, and we are fighting it from last 15 years for only single 100 Rs note.
V Malik
Replied to Laxmi comment 1 decade ago
Dear Laxmi ji, sorry to hear about this, which is symptomatic of the whole issue and the reason why I wrote this article.

Would you like to provide us at MoneyLife with more details of this specific case please?

As of now I am not aware of any Supreme Court citation on the subject.

Shael Sharma
1 decade ago
"The cops don't know how to handle, the Banks don't know how to stop it from
entering their supply stream or maybe they don't care enough, the regulator
is busy fighting other regulators in arcane turf battles, the bureaucrat is
too busy playing russian roullette with ordinances. Complete fucking pot
boiler, except when you get stuck with a 500 or 1000 which has been struck
down as a fake by some styled cashier, with the same mentality as an evil
conductor or bus driver. Fiscal governance by abdication, and you thought
the traffic management was terrible?"
V Malik
Replied to Shael Sharma comment 1 decade ago
the cops know Section 39 of the CrPC and 489 of the IPC, so go to the police station and complain AGAINST the bank in question. That will get the banks to be more careful in future.

There is NO WAY a modern ATM or a teller can and will dispense counterfeit currency UNLESS the bank is involved.
Hemlatha Mohan
1 decade ago
The Bank cashiers also know that filing an FIR with the police for a fake currency is worse than committing suicide- so they quietly destroy the note and replace it. They share this burden amongst themselves as they know that their clan is the most vulnerable to such frauds. As you rightly said , no complaints are filed, hence no fake currency( so it is assumed)
V Malik
Replied to Hemlatha Mohan comment 1 decade ago
There is no way that bank ATMs or tellers can distribute counterfeit currency without involvement of the banks, so the complaint should be lodged by the customer AGAINST the bank at the local Police Station citing Section 39 of the CrPC and 489 of the IPC.
Deepak Patil
1 decade ago
well researched article on counterfeit notes.However am still not clear what I as a man on the street should do if I do land up with a fake note.
V Malik
Replied to Deepak Patil comment 1 decade ago
Thank you Deepak. Am providing options in the next segments - interim, if man on street is stuck with a counterfeit note:-

a) Mark it COUNTERFEIT in big bold marker ink letters.
b) Go to the relevant police station/magistrate and insist on lodging an FIR under Sec 39 of the CrPC and 489 of IPC, read together, specifying how/where you got the currency.

Hope this helps?
1 decade ago
Very good information, Veeresh. I wish our bank and their ATM network can work around something like "Find a fake note in our ATM and win Rs1 Lakh"!, which they will never do, unfortunately.
V Malik
Replied to yogesh comment 1 decade ago
Thank you, Yogesh - and there are some solutions and steps that we have to take ourselves as good citizens. Please wait for part 3 . . . and maybe part 4 also!
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