With the value of counterfeit notes detected during 2008-09 increasing by 183.1 per cent to Rs 15.57 crore (3.98 lakh notes) as against Rs 5.49 crore (1.95 lakh notes) in 2007-08,a Reserve Bank of India panel has recommended a host of measures like installing note sorting machines at all bank branches and enhancing security features in notes to tackle the menace. It also proposed new ATMs installed may be provided with in-built note detectors. Over a period,existing ATMs should also be required to have in-built note detectors. The ratio of fake notes has doubled to eight per 10 lakh notes in 2008-09 as against four in the previous year. The increase in detection is attributable to installation of note sorting machines (NSMs) by all the banks at their currency chest branches to facilitate examination and detection of counterfeit notes at the currency chest level itself and the setting up of the forged note vigilance cells (FNVCs) at the banks, it said. In a bid to curtail the circulation of fake notes,the RBI should direct the banks that they should install note sorting machines in all branches in a phased manner,it said. In the first instance,all branches with average daily cash receipt of Rs 1 crore or above may be equipped with NSMs by March 2010 and branches with average daily cash receipt of more than Rs 50 lakh by March 2011. The banks should provide a road map to RBI for equipping the remaining branches with NSMs,which will be monitored by RBI, the RBI panel headed by deputy governor Usha Thorat said. In order to reduce the incidence of forged notes at ATMs,banks should ensure the quality of the notes fed in ATMs by their agents viz the CIT (cash in transit) companies. Banks may switch over to the cassette swap system for feeding the ATMs. Banks should put in place appropriate controls and monitoring mechanisms over CIT companies as required vide RBI circular on outsourcing by banks. New ATMs installed may be provided with in-built note detectors. Over a period existing ATMs may also be required to have in-built note detectors, the RBI said. According to the panel,the RBI should ensure that the plan for withdrawal of notes is implemented strictly as formulated and that the new series of banknotes with more robust security features be introduced as early as possible. RBI may also facilitate R&D efforts for development of new security features, it said. The central bank observed that as the incidence of fake notes has been increasing individuals may come in possession of a counterfeit note without knowledge of it being a counterfeit and unintentionally become a conduit for circulation of the same by presenting it to a bank,business establishment,etc. This leads to harassment for the member of the public/branch personnel as currently the requirement is that FIR is filed in all such cases and therefore presently there is a marked tendency to under report such cases to the police If any person inadvertently in possession of fake notes up to five pieces tenders them at a bank counter,banks should impound such notes and provide acknowledgement to the tenderer as per current guidelines. Banks should obtain an approved ID document of the tenderer (in case of a customer the bank would already have the necessary documents), the RBI panel said. Currently,there are no cash holding limits prescribed for currency chests of public sector banks in India. The RBI group felt that in the wake of the incident at Dumariaganj and the huge balance maintained at that currency chest at that point of time,there is an urgent need to have cash holding limits for all currency chests and fix optimum balances commensurate with their average transactions that all currency chests need to hold. Banks to update blacklisted Taliban,Al-Qaida names MUMBAI: The Reserve Bank of India has asked banks to update the consolidated list of Taliban and Al-Qaida individuals/ entities covered under the UN1267 Sanction Committee. Utmost care should be taken by banks to ensure to cross check all account opening applications and transactions carried out in the existing accounts with the updated consolidated list and report those accounts to the RBI and Financial Intelligence Unit-India which bear resemblance with the individuals/ entities listed therein, the RBI said in a notification to banks. The list consists of the four sections: individuals associated with the Taliban,entities and other groups and undertakings associated with the Taliban,individuals associated with Al-Qaida and entities and other groups and undertakings associated with Al-Qaida. The list is available on UN website: CMB not for funding fiscal deficit,says RBI MUMBAI: The Reserve Bank today said newly introduced short-term government paper,cash management bill (CMB),is not aimed at narrowing the fiscal deficit. RBI deputy governor Shyamala Gopinath said CMB will act as another tool for the government to raise funds when necessary. CMBs do not aim to fund the fiscal deficit of the Government. This will just add to the menu of instruments for Government to raise money, Gopinath said. With a view to meeting the temporary cash flow mismatches,the government has now introduced CMB,which will operate as non-standard,discounted instruments. The new instrument will enable the government to raise funds in addition to the existing options of ways and means advances (WMA) and treasury bills and will be available as and when required,Gopinath said. The RBI said that CMB will have a generic character of treasury bills.
