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A threat from within

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 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 TOI 

Some of the questions which arise are 

  1. What is the real manifestation of the apparent threat on countries economy in general?
  2. Will RBI be able to deal effectively the present situation?
  3. How are these estimates of the extent of fake currency (169000 crore) are arrived at?

 

Comments

blrpraj's picture

ATM technology to detect fake notes

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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.

idontspam's picture

Cash handling care

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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.

blrpraj's picture

example of a full function ATM with counterfeit detection tech.

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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 :-)

 

idontspam's picture

Its not just the ATM

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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.

blrpraj's picture

agreed

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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.

 

idontspam's picture

Probably too good to be caught

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 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.

My hunch and fear as I stated earlier is that these fakes are probably better than there ever was and hence passing thru the current detectors. I dont know if the detectors have been upgraded to catch these. And again my hunch these fakes are probably so good that the makers are struggling with upgrades. Somebody in the industry privy to these must wake up and tell us what the problem really is? 

muni_blr's picture

More Policing and Severe Punishment to the guilty required

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 As far as i know, the bank does not check for all the notes whether they are counterfeit or not. They only check if the denominations are big and not all notes are checked. I have lost a few thousands when i was depositing and had to let go of it as the bank insisted that it will go to the police if i dint let go of it as i wanted to take that note and deal with the person who gave it to me.

While automated checking( In and Out points) can be enforced at the banks which would bring down a percentage of the fake notes floating around. There are a couple of things that needs to be done additionally.

1) The Police need to get more serious on this and get cracking. Having people specifically for this task woudnt cause much harm.

2) People responsile for this crime should be given severe punishment. With my couple of interactions with the police, i have noted that lower middle class, middle class people are the ones mostly involved in this crime. If proven beyond doubt let it be not less than a life sentence or hang until death ( I am not inhuman but we cannot afford thousands and millions suffer if we cant have strict punishments and instill some sort of fear in people not to attempt such adventures)

At the end of  the day the goverment should not rely on the ordinary man to detect fake notes with his natural senses.

I know how it feels if your hard earned money is snatched away if it turns out to be fake.

Hurry Home

The Sage

abidpqa's picture

Sensitive police too

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The police also should stop considering the reporter as the first suspect.

psaram42's picture

Enabling Technology for Fake Notes Detection

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 The link given by Doc is about a very good example of the work done regarding automatic fake note detection technology enabled ATMs abroad. I agree that it is high time our ATMs too should be Fake Note Detection enabled. We need to find out from RBI sources the efforts made in this direction. 

The story, at the most, at SBI braches is disheartening. They have primitive detection technology at present with them at their branches. The manager at the ADE branch expressed his inability to cope up with the challenge. They work mainly on trust and experience. They need to have better technology and training as early as possible if our country wants to fight this menace. Origin of which may lie partially with inter border terrorism.  It seems even foreign currency also being faked in Sivakasi. The authenticity of such statements even though made at SBI is hard to believe.

Kirit Vora's picture

Fake Note Detection at Cash Desks of Banks & ATM centres

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We feel RBI's deliberation on suggesting bankers the use of "sorting machines" needs further attention to looking for “Genuine & Accurate fake note detectors" which work on data cum image based technology. Sorting machines are working just on image base technology which is limitedly compatible and useful just for fitness/quality sorting of notes and are too poor to detect super fake notes. Sorter just throws out large number of doubtful notes with comparatively large number of false alarms and carries very high possibility of passing super fake notes as genuine resulting into issuance of such notes at cash counters or at ATM centers.
 
The kind of machines Indian Banks at cash counters needed are the machine which can verify not only the images but also can check the chemical and physical properties of papers, inks, resins and other materials used in production of note. The machine should be capable of not allowing any fake note to pass as genuine. It is possible only with the detectors specially developed considering the large number of intricacies concerning to Indian notes. A multi currency super fake note detector/ Currency verification & processing Systems is recently launched by an Indian company having web address www.paradigmcashsystems.com   It is suggested therefore that all the concerned authorities form RBI, Government of India, Banks investigative agencies etc should invariably go through the crucial informations provided in the web site. It could help in curtailing the menace of fake notes prevalent in our country. 

 

Paradigm EXC 6700-I is exclusively developed for validity verification of Indian currency notes –ICNs  & detection of Fake Indian Currency Notes-FICNs mixed/hidden with packets of genuine notes. Most useful at Cash Desks of Banks, ATM centers, large retail outlets, treasuries etc as also at currency chests to process large number of notes that are sorted as suspects by image based heavy duty currency processors.
 
Paradigm EXC 6700 –I is a Desk Top Fake Note Sorter/Detector commonly known as Currency Validity Verification and Processing System or Super Fake Currency Note Detector. It verifies not only varied images, emblems, portraits, texts, water marks, magnetic and other machine readable features of notes but also checks the physical and chemical properties of security paper, varied types of inks, resins, security threads and other materials used in production of notes, constituting large number of check points out of the interrelated combinations & permutations of varied security features in the notes, by automatic one by one pick ups of single note at a time out of the stacked packet of 100 notes of single or mixed denominations, and processes a note in 0.6 seconds and 100 notes in 1 minute. The process includes identification of discrepancies of features in the rejected note for further legal adjudication of its validity. It also counts and valuates the accepted notes both in aggregate as also denomination wise.
 
Its variant model scans, reads, records serial numbers of US Dollars and offer connectivity to PC for print out of serial numbers with summary of denominations, counts and values with personalized information of the users with date and time of operations.
 
psaram42's picture

Welcome to Praja.

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 Hi Kirit

Welcome to Praja.

To see that fake notes are detected at cash counters and the infiltration is nab at very root level of fake notes deposits

 Really a great vision that! 

I am really excited to see the above vision of yours. I had a glance cursorily at your web site. Some points for clarification:- 

  1. Whether the security press at Nasik which prints the currency can identify a fake note 100% truly?
  2. Will the fake note have necessarily a duplicate serial number of the original?
  3. Can these numbers be tracked?
  4. Has your company any collaboration with RBI?
  5. Do you have any other companies competing with yours?
  6. If a fake note is dispensed at an ATM how to prove it?
  7. Etc

 Welcome once again

Kirit Vora's picture

Your Queries

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Please email me your mob number, landline no, your name & brief profile  

psaram42's picture

Fake Note business has a destabilizing effect on our nation.

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 Great Talking to you Vora saheb! 

Your collaborative effort with Japan is definitely worth while. If your machine can detect fake notes effectively it is indeed a long way into curbing the menace. 

May I request you to kindly give your answers to all the points in my comment welcoming you?  It will enlighten us in Praja. You may also like to provide  your web site address in your Praja profile plese.

Thanks.



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