A RED CARD

FIGHT AGAINST COUNTERFEIT CURRENCY

Joginder Singh, IPS (Retd.)
Former Director, CBI

Delhi police claims to have busted a major ISI network, on 25th June, 2007, which was reportedly being used to pushing fake currency into our country. Three arrested men, by name, Nayeem, Wasim and Mohammed Muslim, have revealed that Thar Express, so called, friendship train, running between Munnabao in Pakistan and Jodhpur in Rajasthan, is being used to smuggle fake currency into India. Initial investigation, has also uncovered, that the fake currency was arranged in Dubai. Fake currency to the extent of Rs. 33 lakh was seized from them. According to police, the Indian currency is printed in Pakistan and illegally brought to India through Nepal, Bangladesh, Sri Lanka, Malaysia and Thailand.

The interrogation has also exposed, that the ongoing rate is Rs. 40,000 to Rs. 65000, for every One lakh of fake currency, depending upon the quality of notes. Earlier in April, 2007, two persons, who allegedly smuggled over Rs. 50 lakh worth of fake currency from Pakistan into India, were arrested. The Rs. 500 and Rs. 1,000 notes were of such a fine quality, that only an expert could tell, that they were fake.

The department of revenue intelligence, has reportedly seized consignments of counterfeit currency worth over Rs. 1 crore at the Mumbai, Chennai and Kozhikode airports from March, to May, 2007. Quite possibly, a huge quantity of “Made in Pakistan” notes may already have been pumped into Indian financial system. Dubai and Colombo have become the distribution and storing points. It is from there, the seasoned smugglers bring the currency to India by air. Customs officials often miss the currency bundles, at airports as X-ray machines cannot detect them.

In early May, 2007 Directorate of Revenue Intelligence, arrested a man with Rs. 20 lakh in fake currencies, all printed in Pakistan, at the Kozhikode airport. In February, 2007, three persons were arrested from the Chennai airport with over Rs. 30 lakh in Indian fake currency. It might appear bizarre, that a 77-year-old woman Laiquan, a resident of Delhi’s Trilokpuri area, was arrested, for smuggling fake Indian currency of more than Rs. 10 lakh in February, 2007 at the Delhi International airport. She was returning to India from Lahore. Laiquan used to travel to Pakistan on the pretext of meeting her family members in Lahore. It was Laiquan’s fourth visit to Pakistan.

It is also believed that Pakistani ISI is using Dawood Ibrahim’s network across Thailand, Nepal, Bangladesh, Dubai and India for financing terrorist activities and destabilising the Indian economy in the long run, through circulation of fake Indian currency notes (FICNs). Unofficial estimates put the number of FICNs in circulation at 61,000 million pieces (of different denominations) worth Rs. 1,69,000 crore till the year 2000. The actual seizures were merely worth Rs. 5.57 crore in 2002, Rs. 5.29 crore in 2003, Rs. 6.81 crore in 2004 and Rs. 1.12 crore in 2005 (till March).

There is no way, by which counterfeiting can be stopped, which is probably, as old, as the money itself. Before the introduction of paper money, the two main ways of doing it, were to mix base metals in what was supposed to be pure gold or silver, or to “shave” the edges of a coin, so that it weighed less than it was supposed to. An English couple Thomas Rogers and Anne Rogers were convicted on 15 October 1690 for “Clipping 40 pieces of Silver” (in other words, clipping the edges off silver coins). Thomas Rogers was hanged, and his wife Anne Rogers, was burnt alive. The gruesome forms of punishment were due to the two’s acts being construed as “treason”, rather than a simple crime. In America also, counterfeiting used to be punishable by death. For example, paper currency, printed by Benjamin Franklin, often bore the phrase “to counterfeit is death.”

Modern counterfeiting begins with paper money. Nations have used counterfeiting as a means of warfare. The idea is, to overflow the enemy’s economy with fake bank notes, so that the real value of the money plummets. Great Britain did this during the Revolutionary War in USA, in 1776, to reduce the value of the Continental Dollar. This tactic was also employed by the United States during the American Civil War. The fake Confederate currency, it produced, was of superior quality to the real thing.

During World War II, the Nazis attempted to do a similar thing to the Allies with Operation Bernhard. The Nazis took Jewish artists, in the Sachsenhausen concentration camp and forced them to forge British pounds and American dollars. The quality of the counterfeiting was so good, that it was almost impossible to distinguish between the real and fake bills. The Germans could not put their plan into action, and were forced to dump the counterfeit bills into a lake. The currency notes were recovered only in the 1950s.

Today the finest counterfeit banknotes are claimed to be U.S. dollar bills produced in North Korea. The fake North Korean copies are called Superdollars because of their high quality. Bulgaria and Colombia are also significant sources of counterfeit currency. Even in UK, police recovered 2.2 millions pounds worth of fake notes, in 2004.

A question which comes uppermost in the minds of people is, what is the need to check counterfeit currency. Counterfeit money in circulation, leads to the reduction in the value of real money. It also leads to increase in prices, which is also called inflation, caused due to more money getting circulated in the economy. A reputation of fake currency diminishes the acceptability, confidence and credibility of a country, in the comity of Nations. Industry and business do not run or paid for in counterfeits, which in turn leads to the increase in the prices.

Our Government is shackled in the bureaucratic mind set which is loath to change. At least 20 countries, in the world, including Australia, New Zealand and Romania, with variants in Bangladesh, Brazil, China, Mexico, Singapore and Sri Lanka, are using plastic notes, which are supposed to be more durable, being made of non-porous polymer with a special protective coating that prevents absorption of moisture. Such notes are said to be more counterfeit-proof. Some countries like Mexico that have used polymer technology have clear stamp-sized plastic windows which are said to be difficult to forge. Once their life is over, the notes can be re­cycled and used as plastic products. Reserve Bank of Australia, which claims to have developed the technology for using polymers for currency, first experimented with these currency notes in 1988 to mark the Australian bicentenary. It has completely shifted to plastic money by 1996. New Zealand and Romania have also done the same. It is worth trying this experiment, at least with lower denomination notes in our own country.

The only way, we in India, can tackle this problem is to exercise vigilance, on the part of every citizen, “If men were angels, no government would be necessary.” But as they are not, so we have to be vigilant. This battle, is not only for the strong alone; but for the vigilant, and the active.

Following tips can be useful for every citizen. Have a close look at the money you receive. Compare a suspect note with a genuine note of the same denomination and series. Pay attention to the quality of printing and paper characteristics. Look for differences, not similarities. The genuine note shows, the portrait of Mahatma Gandhi lifelike, it stands out distinctly from the background. The counterfeit portrait is usually lifeless and flat. Details merge into the background which is often too dark or marked or dappled. Note down from whom and where you received such a note and promptly inform the law enforcement agency about.

The Government on its part, should encourage fair and fearless reporting of the fake currency. Otherwise, in the normal course, the person making the report becomes the primary suspect. This leads to the generation of a tendency wherein people prefer to suffer a loss, than face the hassle of registering a case and then going to the court.
Remember criminals are always better organized and it is a part of our duty, to defend our currency.