Observation:Counterfeit currency has lately become a big problem in most countries, including India. Although there are a number of signs that can be used to differentiate between counterfeit and authentic currency, it is not easy for the common man to check each currency note during a transaction. Advancement in technology has made the difference between the two quite small, making it even more difficult. However, existence of counterfeit money in the markets for any economy is of great concern especially if it finds its way in the banks.
Suggestion:
In order to flush out counterfeit currency from the system, the government will have to take multiple measures:
In order to flush out counterfeit currency from the system, the government will have to take multiple measures:
- The first step should be to give all banks operating within a country a time frame within which each bank has to check every bill note it has in its cash reserve for authenticity using specific devices.
- The amount of counterfeit currency in each branch should be reported to the Government which will then look at tracing the funds and / or writing off the cash
- Each bank has to ensure that all incoming cash deposits are also checked for any anomalies using the CVPS machines.
- Establishing the amount of counterfeit currency in each bank would help establish the cities / areas which have been affected more and have perhaps become the centres for fake bill circulation. This would in turn help the police to nab those behind the entire operation.
- At the same time, currency scanners should be made a mandatory requirement for all shops having a license to operate all over the country
An intensive screening is required to first flush out existing counterfeit bills and subsequently make sure that fresh counterfeit currency is not able to enter the system.
2 comments:
The entry point of counterfeit currency has to be blocked.
1] As far as possible do transactions using credit or debit cards.This restricts the way we use cash .This also helps in controlling black money in the market.
2]As you suggested all cash deposits should be scanned.Once we have all digital transactions this would become the only entry point which needs to be checked.
3]Also till the point we can have all digital transactions, everything should be carried out in the lowest denomination as possible.Counterfeit money usually exists in big denominations to percolate in the market easily.
Dear Anand,
Thank you for your suggestions. I particularly liked the one on doing transactions via 'Plastic' money. Moreover, in a country like India, where a lot of people do not have credit cards,it would greatly help to carry out transactions in lower denominations, just like you suggested. A one time support from the government to clean up the bank reserves by allowing institutions to declare bad funds (to be reimbursed by the govt.) would also help.
Thank you so much for your valuable comments :) Really appreciate it!
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