Sunday, May 5, 2013

RBI to incentivise banks for reporting counterfeit notes

http://www.business-standard.com/article/finance/rbi-to-incentivise-banks-for-reporting-counterfeit-notes-113050500084_1.html

The Reserve Bank will introduce a scheme of incentives for banks to encourage them to report detection of counterfeit notes.

"In view of the recommendation of the DPSC for addressing the menace of counterfeit notes, it has now been decided that in order to encourage banks to report counterfeit notes, detected by them, a scheme of incentives for banks will be introduced," RBI Governor D Subbarao has said in the Monetary Policy Statement for 2013-14.

The Department-related Parliament Standing Committee (DPSC) on Ministry of Home Affairs in a report has recommended the RBI to constantly upgrade security features in high value currency notes and strengthen mechanisms for detection of counterfeit notes.

The existing penalty for non-detection and non-reporting of counterfeit notes by banks is also being revisited, the Governor said.

The RBI will release the detailed guidelines regarding this by the end of June.

Subbarao said incorporating new security features or new designs in the banknotes to stay ahead of counterfeiters is an ongoing process and the process of incorporation of better and improved security features has been initiated by the government in consultation with the RBI and other stakeholders.

As per the RBI data, in 2011-12 as many as 521,000 counterfeit notes were detected in the system.

The recent advances in printing technology have greatly aided production of counterfeit notes which is posing serious threats to the currency and financial system.

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