Mumbai: NIA sounds alarm over fake small notes

RBI data reveals six-fold rise in seized notes from 2016 to 2020; recent raids on Dawood Ibrahim’s network led the agency on the FICN trail

Somendra SharmaUpdated: Thursday, August 18, 2022, 01:37 AM IST
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Mumbai: NIA sounds alarm over fake small notes | Representational pic

The National Investigation Agency’s (NIA) Terror Funding and Fake Currency (TFFC) cell has warned of counterfeit smaller denomination Indian currency notes (Rs 50, Rs 100 and Rs 500) flooding the market. The TFFC cell was constituted by the Centre in 2021 to conduct focused investigations in fake currency and terror funding cases.

As per the Reserve Bank of India (RBI), counterfeit currency totalling to nearly Rs 16 crore was seized in 2016, which rose to Rs 25 crore in 2019 and sharply to nearly Rs 92 crore in 2020. The RBI data also reveals that the total volume of currency notes also increased substantially from 2,81,839 pieces in 2016 to 8,34,947 pieces in 2020, though the clear distinction between various denominations isn’t clear.

However, some indications come from the RBI’s annual reports, which state that a whopping 101.9% more fake Rs 500 notes (79,669 pieces) were detected in 2021-22 in comparison to 2020-21. As per the report, out of the total fake Indian currency notes (FICN) detected in the banking sector, 6.9% were detected at the central bank and 93.1% at other banks.

To reduce the menace, the RBI plans to introduce Central Bank Digital Currency (CBDC) to replace the Indian currency for digital transactions. It is also planning to adopt a graded approach to introduce CBDC (announced in the Union Budget 2022-23), for which an appropriate amendment to the RBI Act, 1934, was included in the Finance Bill 2022.

Meanwhile, the recent series of raids on fugitive gangster and designated global terrorist Dawood Ibrahim’s network in India has led the NIA to the massive FICN operations active with support of Chinese and Pakistan deep state. The agency has identified 21 associates of Dawood’s gang active in printing counterfeit currency, its distribution and circulation to fund unrest in India.

In May, simultaneous raids on 29 premises in and around Mumbai, suspected to be linked to Dawood’s associates and hawala operators, had led the NIA on the trail of FICN.

The FICN Coordination Group (FCORD) formed by the Ministry of Home Affairs, also constituted in 2021, has shared intelligence amongst various security agencies of the state and the Central government to counter the circulation of fake currency notes.

The controversial Mehran Paper Mill in Kotri, (Sind, near Karachi), sanctioned by the US over links to Dawood and ISI, resumed operations in 2020 supplying high quality paper for printing fake notes. The mill is said to be owned by Dawood’s younger brother Anees Ibrahim. Key Dawood aide Aftab Batki is said to smuggle fake Indian currency to Dubai for further distribution in India.

The unavailability of Rs 2000 notes is said to have led the clandestine racket of counterfeiters to print smaller bank notes, said an agency official.

A senior official with the Financial Intelligence Unit monitoring fake currency in the Indian economy said, “The RBI doesn’t have a clue on the actual numbers of fake notes in circulation and the numbers detected and seized are just a fraction of the actual amount. Digital payments need to be made secure for the public to be confident and shift from cash transactions.”

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