Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. In India, the circulation of fake Indian currency notes (FICN) has been on the rise, according to the Reserve Bank of India’s (RBI) annual reports. The year 2014-2015 saw a steep rise, with 594,446 FICN detected, up from 488,273 in the year 2013-14.
Most counterfeit Indian currency notes are printed in Pakistan and then enter either directly or through network of other countries like Bangladesh or Nepal. Recently Malda district near Kolkata in West Bengal has emerged as a centre of Fake currency distribution. There are several reasons as to why Malda has emerged as a fake currency hub. These include:
- Its proximity to India Bangladesh border hence fake currency from Bangladesh enters easily.
- Its connectivity via rail and road to other parts of India which enable circulation to different parts quickly.
- Loose Police administration due to lack of political will.
- Lack of employment leads active participation of the youth in this racket that allows them to make money quickly.
Effects of Fake currency
- Circulation of fake currency leads to inflation as it increases the amount of money in circulation which may lead to high demand for goods and commodities.
- The non-reimbursement policy of banks occurs when banks reject the fake notes and do not reimburse the losses.
- It leads to currency devaluation.
- It leads to the loss of public confidence, black marketing of products, and illegal stocking of products.
- Most importantly the printing and circulation of FICN provides dual benefits for terrorist organizations targeting India, the circulation of FICN threatens India’s economy while the profit that is earned from doing so is used to fund covert activities targeting India.
Challenges
- The most important challenge is in the form of long and porous border India shares with its neighbour that allow easy entry of fake currency.
- No or little development in border areas as in the case of Malda forces the youth to indulge in such activities.
- Recently the accuracy of fake currency is cropping up as the biggest challenge as it nearly impossible to detect the fake note without any expertise.
Recent developments and way ahead
- The government has formed a special Fake Notes Co-ordination (FCORD) Group in the Home Ministry to share FICN information with security agencies of states and the Centre.
- A Terror Funding & Fake Currency Cell (TFFC) is also constituted in the National Investigation Agency to investigate terror funding and fake currency cases.
- Under the Unlawful Activities (Prevention) Act, 1967, effective from February 1, 2013, damage to the monetary stability of India by production, smuggling or circulation of high quality fake Indian paper currency, coin or any other material has been declared an act of terror.
- Also Government has taken the move of demonetization in order to counter fake currency.
- A MoU with Bangladesh to prevent the counter-smuggling and circulation of fake currency notes.
- Recent decision to install laser wall and sensors at India Bangladesh border will help to check the problem of porous border.
A part from these, more MOUs with neighbour to check printing and strict actions on people indulge in their country, a strong political will in concerned state that allows stringent action against such mafia and last but not the least development is the key that automatically prohibits the people to be part of such illegal activity.