This is how Telgi did it

Barde described Nashik Mint as an institution grappling with severe inadequacies in security management despite the sensitive nature of its operations. The ISP, which prints stamps, stamp papers, passports and currency, he said, could rarely manage to keep track of consignments once they passed through the gates of the Press.

The shortcomings in monitoring systems and security practices were exposed after the Telgi scam hit headlines. Barde said ambitious projects are now underway to beef up the system, including a plan to attach radio frequency tags to consignments in transit and track them using satellite systems. ‘‘An autonomous agency on the lines of RBI’’ is also needed to monitor supply and consumption of security stationery, he said.

Excerpts from an interview:

How did Telgi managed to run such a massive racket?

Since the matter is sub judice, I would only say that loopholes in the system, not just the ISP, greed of all those involved and a ready market of bulk buyers facilitated Telgi.

How does the system work?

The states place their indents with the Central Stamps Depot (CSD) which is on the ISP premises. The CSD forwards the order to the ISP, which prints the required number of stamp papers. The consignments are then sent to the states by road or rail to the respective nodal agency, which distributes it to treasury offices which in turn distribute them to stamp vendors.

What were the loopholes?

The indent and consumption of each state was not monitored. The sale of stamps by vendors and registration of stamps with registrars not tallied. There is no “day-closing” of stamps transactions by vendors on lines with the “day-closing” of accounts in banks. There is a lot of pilferage in transit. There have been cases where trucks carrying consignments of stamp papers did not reach or reached with a large chunk of the consignments being stolen in transit. In such cases, there is no provision for complaint. The CSD merely passes a remark, “acknowledgement not received”, against such consignments. Since there was no cash transaction between the CSD and states and only book entries are made, nothing happened.

What happened after the Telgi scam broke out?

It came as a shock. The ISP general manager was arrested and dismissed while about half a dozen officials were arrested and are being prosecuted. Since the matter is sub judice I would not like to comment further. But the Telgi scam did initiate certain improvements.

What improvements?

Now the ISP has started printing distinctive numbers and the name of the respective state (which places the indent with the ISP) in ultraviolent ink on the stamp papers of higher denominations. The ISP has also started taking advance payment from states which place indents for stamp papers and efforts are being made to keep track of the stamps after being despatched.

What else can be done to plug loopholes?

There is a proposal for microperforation of stamp papers. There is also an idea of using “Radio Frequency Tags”, which are of the size of a postage stamp and can be stuck on consignments carrying stamp papers delivery. The movement of the tags can be tracked through the Global Positioning System.

The initial cost for the equipment is around $ 20,000, but it is worth trying. We need an autonomous agency on the lines of the RBI to work out a policy on security stationery (like stamps, stamp papers, passports, currency notes, etc); take charge of the supply of security stationery from the processing of indents to monitoring consumption, including the tally of the sale and registration of stamps.

What are your future plans?

Since I have been associated with this system for a long time and was a mute witness to the investigations into the Telgi episode, I have a story to tell. Hence, I am writing my thoughts based on my experiences.

Would it not amount to violation of the secrecy behind which institutions like the ISP function?

No. The people should know certain things kept under wraps. See the RBI website and it gives detailed information on currency notes, whereas the ISP website merely gives information on tenders. There is no information which can help a common man detect counterfeit stamps.

Will there be another Telgi?

There is always a possibility of another Telgi being born. Remember that pilferage of stamp papers in transit led to shortage. And bulk buyers were desperately looking for someone who would supply required quantities. Telgi would not have prospered without the support of bulk purchasers like banks, financial institutions, insurance companies and other private companies. I feel that there should be an inquiry against such bulk purchasers.