Banking News Dated 31st August 2018 | SBI warns of 'noticeable increase' in counterfeit notes detected in new Rs 500, Rs 2,000 notes

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Banking News: August 31, 2018

Banking News Dated 31st August 2018 | SBI warns of 'noticeable increase' in counterfeit  notes detected in new Rs 500, Rs 2,000 notes

SBI warns of 'noticeable increase' in counterfeit
notes detected in new Rs 500, Rs 2,000 notes

The International Business Times (IBTimes)
Published on August 30, 2018

There was a "noticeable increase" in the fake currencies detected in the denomination of the new Rs 500 and Rs 2,000 notes which are up by 4,178 per cent and by 2,710 per cent respectively

Mumbai, August 30:  The State Bank of India (SBI) has said that the newly introduced notes can be counterfeited and the consumers and banks should brace themselves for more fake note discoveries. The report published by SBI has a divergent opinion with the RBI claims which said that the newly introduced notes of Rs 100, 500 and 2,000 have some additional security features and cannot be counterfeited.

In a report released after the RBI published its annual report, the in-house SBI economist said, "The promise of RBI that new currency notes of Rs 200 and Rs 500 (post demonetisation) are more secure and less prone to counterfeit is not entirely correct."

The report said that there was a "noticeable increase" in the fake currencies detected in the denomination of the new Rs 500 and Rs 2,000 notes which are up by 4,178 per cent and by 2,710 per cent respectively.

It also added that going by the same trend, "it is expected that the number of counterfeit notes in the denomination of Rs 500 (new) and Rs 2,000 may increase further and RBI/banks/public should pay more attention to that".

Interestingly, the annual report of the Reserve Bank of India (RBI) said almost all the Rs 500 and Rs 1,000 denomination notes which were demonetised on November 8, 2016, has returned to the banking system. The opposition parties raised some serious question to the government after on the objective of this prompt step.

Moreover, the reported also said that out of Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes which were in circulation before 8th November 2018, 99.3 per cent or Rs. 15.31 lakh crore came back into the banking system of the country. Only Rs. 10,720 croreof the demonetised currency did not return to the banking system as against the government claim of the about Rs. 3 lakh crore.

The SBI report also said that post demonetisation and the introduction of new notes, there was a sharp drop in the fake currencies by 31.4 per cent to 5.23 lakh pieces in the financial year 2017-18.


40% haircut: SBI offloads Bombay Rayon debt

Shritama Bose
The Financial Express
Published on August 31, 2018

Mumbai, August 30: State Bank of India (SBI) has completed the sale of its Rs 2,261-crore exposure to Bombay Rayon Fashions (BRFL) to JM Financial Asset Reconstruction Company (ARC) for Rs 900 crore, according to persons familiar with the development.

The lender has taken a 40% haircut on the transaction but is hoping for an upside from its 29% equity stake in the company. SBI has received Rs 840 crore in cash while the remaining Rs 60 crore is in the form of security receipts redeemable over three years.

Even as a part of the loan exposure has been sold, SBI, as the lead lender, is currently running a sale process for the exposures of Bank of India (Rs 127 crore), Allahabad Bank (Rs 108 crore) and Karnataka Bank (Rs 13 crore).

Lenders had recast BRFL’s debt under the corporate debt restructuring scheme. Other than SBI, a couple of lenders hold equity stakes in the company.

The resolution of the BRFL exposure could have been initiated under the recently signed inter-creditor agreement (ICA), but bankers said the guidelines were awaited.

“SBI did want to resolve the account under ICA, but some of the other banks did not want to take that route till the operating guidelines for lead lenders were issued,” a banker explained.

These guidelines are yet to be circulated among banks.

Emails sent to SBI and JM Financial ARC remained unanswered till the time of going to press.

The sale is being conducted through the Swiss challenge method by SBI on the request of the three banks. The 14-day window for bids for these exposures opened on Monday.

One of the bankers FE spoke to said that while 13 expressions of interest have already been received for the smaller exposures to BRFL, reconciling them with fragmented shareholding pattern of the asset could be a challenge.

While Bank of India has set a 90.22:9.78 ratio for the sale of its exposure, Allahabad Bank and Karnataka Bank are keen on making a 100% cash recovery.

SBI will write back Rs 890 crore of the Rs 1,962 crore worth of provisions made against the account, following the sale of its exposure to JM Financial ARC.

BRFL is one of the non-performing assets that would have to be referred to the National Company Law Tribunal or resolution under the Insolvency and Bankruptcy Code if it is not resolved by other means over the next few days, as per the Reserve Bank of India’s February 12 circular.


Rupee slides further to end at fresh
lifetime low of 70.74 against US dollar

Anup Roy
The Business Standard
Published on August 31, 2018

Mumbai, August 30:  The rupee slipped further to yet another record low, prompted by sustained dollar demand by oil importers, and possibly defence-related purchases.

A possible US sanction on India, if it goes ahead with buying Russian air defence system, also weighed on the sentiments, currency dealers said.

The partially convertible currency fell to its intraday low of 70.86 a dollar, but closed at 70.74 a dollar, as the central bank sold dollars in the market to cool the exchange rate off.

So far this year, rupee has fallen 9.7 per cent, making it the worst performing currency in Asia. Rupee’s loss against the dollar in the last few days comes in the background of weakness in emerging markets currencies, particularly Turkish Lira, which fell more than 5 per cent. South African Rand and Indonesian Rupiyah also fell sharply. However, the US dollar has largely kept steady against major global currency, and in the past few days have lost against major currencies on some days.

The dollar index, which measures the greenback’s strength against major global currencies, was trading at 94.583, down 0.02 per cent from its previous close.

One major reason for the rupee’s loss, however, is continued rise of crude oil prices. Crude prices rose as supply shrank after Iran sanctions. Brent crude touched $77.64 a barrel on Thursday.

“Oil prices are not coming down, and it will need a very strong good news on the oil front to get a handle on the exchange rate now,” said a senior trader with a foreign bank. Even as portfolio flows turned negative year to date, in August, the flows have been positive, but only marginally.

The recent loss of rupee, however, is a good news for the export sector, as the exchange rate is acting as a kind of subsidy for the exporters. Being the month-end, the exchange traded segment also saw some open interest maturing, which put pressure on the rupee.

The Reserve Bank of India (RBI) though is not intervening as much as the market would have wanted it. The reserves have fallen about $24 billion from its peak in April to just about $400 billion now.


Demonetisation only helped
Crony Capitalists: Rahul Gandhi

The Business Line
Published on August 31, 2018

New Delhi, August 30: Congress President Rahul Gandhi has accused Prime Minister Narendra Modi of lying to the people of the country on the “benefits” of demonetisation. He said the result of the notebandi is out — all the money is back with the exchequer.

“I want to tell the youth and retailers that Modi took money from the people to help 10-15 crony capitalists of the country. This was the biggest aim of demonetisation. Modi’s friends used the opportunity to launder black money and we have seen how a Gujarat cooperative bank, of which BJP President Amit Shah is a Director, changed Rs. 700 crore old notes,” he said.

“He (Prime Minister) promised the people that demonetisation will end black money, fake currency and terrorism. Now, the entire money is back. Two per cent of the GDP and employment of crores were taken away. The PM must answer what was the logic and reasoning for such a big blow on the people,” he said.


Formalisation of economy a sign of
demonetisation success, says Jaitley

The Business Line
Published on August 31, 2018

More money in the system, higher tax revenue
 are the positive impacts: Finance Minister

New Delhi, August 30: Finance Minister Arun Jaitley found himself defending demonetisation yet again on Thursday, stating that invalidation of the non-deposited currency was not the only objective of demonetisation.

More formalisation of the economy, more money in the system, higher tax revenue, higher expenditure, and higher growth after the first two quarters are the positive impact of demonetisation, he wrote.

Jaitley’s defence this time came after the Opposition upped its attack on the government after the Reserve Bank of India’s annual report for 2017-18 revealed that over 99.3 per cent (Rs. 15,31,073 crore) came back into the system after the Centre withdrew Rs. 500 and Rs. 1,000 currency notes worth Rs. 15,40,000 crore.

Jaitley also cited facts and figures in his latest Facebook blog post —‘Demonetisation and its impact on Tax collection and Formalisation of the Economy.’

“The larger purpose of demonetisation was to move India from a Tax Non-compliant society to a compliant society. This necessarily involved the formalisation of the economy and a blow to black money,” he said. Jaitley wrote that when cash is deposited in banks, the anonymity of the owner of the cash disappears. The deposited cash is now identified with its owner, allowing for an inquiry into whether the amount deposited is in consonance with the depositor’s income.

“Post demonetisation about 1.8 million depositors have been identified for this enquiry. Many of them are being fastened with tax and penalties. Mere deposit of cash in a bank does not lead to a presumption that it is tax-paid money,” he wrote.

Rise in tax returns

Stressing on the health of the economy, Jaitley said the number of Income Tax Returns went up to 6.86 crore in 2017-18 from 3.8 crore in 2013-14. In the last two years, when the impact of demonetisation and other steps is analysed, I-T returns have increased by 19 per cent and 25 per cent, which is a “phenomenal increase”. He also pointed out that the number of new returns filed post demonetisation increased in the past two years by 85.51 lakh and 1.07 crore, respectively.

Advance tax collection during the first three months of the current fiscal has increased for personal income-tax assessees by 44.1 per cent and for the corporate tax category by 17.4 per cent. Total income-tax collections went up to Rs. 10.02 lakh crore in 2017-18 from Rs. 6.38 lakh crore in 2013-14.


Income Tax Collections & IT Returns Filed
Year wise Breakup

Income Tax Collected
(Rs in Lakh Crore)
Number of IT Returns filed
(in crore)

Demonetisation announced in November 2016
Source: Income Tax Department


Demonetisation: What India gained, and lost

Prabhash K Dutta
The India Today
Published on August 30, 2018

Mumbai, August 30: The Reserve Bank of India (RBI) has come out with its annual report giving a balance-sheet of demonetisation implemented 21 months ago. Of Rs 15.41 lakh crore demonetised currency notes of Rs 500 and Rs 1,000 denominations, only Rs 10,720 crore did not reach to the banks or the RBI.

This means only 0.7 per cent of demonetised currency notes were junked in the exercise. The government had initially expected that approximately Rs 3 lakh crore of demonetised currency notes would not come back to the banking system, thus shedding the substantial weight of black money.

While announcing demonetisation on November 8 in 2016, Prime Minister Narendra Modi had outlined three broad objectives to fight black money, corruption and terror funding. These objectives have always been debatable for the lack of accurate verifiable data.

Soon after the RBI released its annual report, former Finance Minister P Chidambaram launched a fresh attack on the Modi government saying that the country paid a huge price for demonetisation by way of job loss, closure of industries and the GDP growth.

"Indian economy lost 1.5 per cent of GDP in terms of growth. That alone was a loss of Rs 2.25 lakh crore a year. Over 100 lives were lost. 15 crore daily wage earners lost their livelihood for several weeks. Thousands of SME units were shut down. Lakhs of jobs were destroyed," Chidambaram said in a series of tweets. The Congress demanded an apology from PM Modi.

Demonetisation cost for RBI

When demonetisation was announced, the RBI and the currency printing presses were unprepared to replace the volume of the recalled currency notes. The currency printing machinery had to run overtime to meet the targets.

The RBI spent close to Rs 13,000 crore over the next two years to remonetise Indian money market in post-demonetisation phase. New notes of Rs 500 and Rs 2,000 were introduced. The designs were markedly different from the recalled ones. This escalated the cost of printing as it had several new features.

The RBI report says that Rs 7,965 crore was spent in 2016-17 on printing new notes both old and new denominations. In 2017-18, the amount spent on printing notes stood at Rs 4,912 crore. The money spent on the printing of notes in post-demonetisation was very high. The RBI had spent Rs 3,421 crore on printing currency notes a year ago, that is, in 2015-16 (July to June cycle).

Such high spending on note printing impacted the profit of the RBI which reflected in the dividend that it paid to the government. The RBI had transferred a surplus of Rs 65,876 crore to the government in 2015-16. But when the amount of dividend declined by more than half in 2016-17 when demonetisation was implemented. The RBI paid a dividend of Rs 30,659 crore.

It went up again in 2017-18 but did not touch the mark of 2015-16. The RBI paid Rs 50,000 crore as dividend to the government earlier this month. Demonetisation appears to be the spoiler-in-chief for the RBIs profit.

Money in Market Post-demonetisation

Before demonetisation, India’s money market had the overall circulation of banknotes worth Rs 17.97 lakh crore on November 4, 2016. The banned banknotes constituted 86.4 per cent of the total money in circulation.

Today, according to the RBI, overall banknotes in circulation are worth Rs 18.03 lakh crore (March 2018). This means the volume of currency in circulation is 9.9 per cent more compared to March 2016-level.

The share of high denomination currency notes was 86.4 per cent at the time of demonetisation. The RBI says that the share of Rs 500 and Rs 2,000 notes is 80.6 per cent. This indicates a 5.8 per cent increase in the use of small denomination currency notes.

Was Demonetisation a success?

Officially, yes. The government says so. Economic Affairs Secretary Subhash Chandra Garg says so. Garg explains, Demonetisation achieved its objectives quite substantially. The currency in the system now is 87-88 per cent, that is, about Rs 3-4 lakh crore less currency than it would have been if the system would have continued in the old manner.

Another argument has been an assault on the counterfeit notes post-demonetisation. However, the RBI report says that detection of fake Rs 500 and Rs 1,000 decreased by 59.7 and 59.6 per cent in after demonetisation.

There was, though the increase in detection of fake notes in Rs 100 and Rs 50 denominations. The RBI says, "Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of Rs 100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of Rs 50."

On black money, the government had in August 2017 said that nearly Rs 3 lakh crore that had remained out of the banking system was deposited in banks post-demonetisation. It claimed that over Rs 2 lakh crore of black money reached banks.

The government has maintained that the Income Tax Department is examining about Rs 1.75 lakh crore of suspicious deposits post-demonetisation. Around 18 lakh people with disproportionate income have been identified by the I-T officials. Action against them and exaction of tax with a penalty will achieve the stated objective of fighting black money.

More than 105 people had died in the post-demonetisation rush for cash across the country. Demonetisation also hit small-scale businesses. According to the Centre for Monitoring Indian Economy (CMIE), demonetisation caused loss of about 15 lakh jobs. The CMIE compared the employment data for January-April 2017 with the figures for the September-December quarter of 2016, when demonetisation was implemented.

A fresh war of words has ensued between the supporters and opponents of demonetisation broadly aligned along political divide. Was demonetisation a success or failure? It is for the readers to decide in the view of known demonetisation facts.


Govt seeks higher TDS collection in
bid to improve direct tax revenue

Gireesh Chandra Prasad
The Mint
Published on August 31, 2018

Tax deducted at source accounted for more than 40%
of the ₹ 10 trillion gross direct tax revenue in FY18

New Delhi, August 30:  Tax officers are intensifying efforts to enforce businesses’ obligation to deduct tax at source (TDS) and pay the same to the government on schedule as part of a drive to widen the direct tax base and keep tax collection a less intrusive affair.

Field officers of the income tax department are taking a series of steps including spot verifications, launching prosecutions for lower deductions and closer monitoring of payments made to foreign entities to enforce compliance. Tax deducted at source accounted for more than 40% of the ₹ 10 trillion gross direct tax revenue in FY18.

The government is keen to step up direct tax revenue as it will go a long way in lowering the tax rates in lower income brackets. A new direct tax code, which is currently being prepared, is pursuing this.

In Delhi alone, more than 150 prosecution proceedings have been launched from April to July period of 2018, said a statement from office of principal chief commissioner of income tax, Delhi.

Delhi has the highest number of applications in the country from TDS defaulters who compound their offence by paying additional fee and avoid prosecution, said the statement.

“TDS wing of the Income Tax Department, Delhi is taking strict action against such deductors who do not comply with the TDS provisions and divert the tax deducted for their business activities or any other purpose for which they are the custodians of the government dues,” said the statement.

Businesses are required to remit to exchequer the tax deducted in a particular month within the first week of the next month. Enforcing compliance of TDS provision is a priority for the Modi government as it has a direct bearing on tax revenue. TDS is also a non-intrusive mode of tax collection as the onus of payment lies with the entity that makes payment to the income earner.

The Central Board of Direct Taxes (CBDT), the apex direct tax policy making body, earlier this year asked field officers to pay special attention to TDS compliance and set a target of at least 10 surveys (visit to taxpayers’ premises) a year for assessing officers in charge of TDS compliance. The other key targets given to tax officials are in the areas of gross tax collection, increasing the number of tax return filers, recovery of tax dues and clearing appeals from tax payers.

One factor that helped the authorities in boosting direct tax collection is the increased surveillance from linking Aadhar to Permanent Account Number (PAN) and to bank accounts as well as the data on sales reported by businesses to the Goods and Service Tax Network (GSTN), the IT backbone of the new indirect tax system.

Increased use of information technology in taxation has enabled the direct and indirect tax authorities to work closely in checking evasion. CBDT has a target of ₹11.5 trillion gross tax receipts in FY19, 14.6% more than what it collected last fiscal.


RBI squeezes supply of Rs 2,000 notes
to curb black money hoarding: Report

The ET-Now News
Published on August 30, 2018

Soon after the introduction of Rs 2,000 notes as part of the government’s ‘remonetisation’ programme, there were reports of mass illegal hoarding activities.

Kolkata, August 30:  In a bid to intensify a crackdown on black money, the Reserve Bank of India (RBI) has initiated proceedings to reduce the number of Rs 2,000 denomination notes in circulation by restricting excess hoarding, reported ET. 

Worth mentioning that the proportion of Rs 2,000 denomination notes in circulation have dipped to just 37 per cent of the total notes in comparison to 50 per cent earlier. It should also be noted that the indent (order) of Rs 2,000 denomination notes have been reduced to just 15.1 per cent last year from 350 crore pieces a year ago. 

Soon after the introduction of Rs 2,000 notes as part of the government’s ‘remonetisation’ programme, there were reports of mass illegal hoarding activities. In addition, there have been several scattered reports of people caught with fake or counterfeit currency. 

Rs 500 circulation surges

On the other hand, the circulation of Rs 500 denomination notes has surged sharply-from 23 per cent a year ago to 43 per cent.  The overall indent of Rs 500 notes in 2017-18 was 9.1 per cent higher in comparison to the year ago.

Another fact worth mentioning is that the value of banknotes in circulation grew over 37 per cent to over Rs 18 lakh crore, as per the figures recorded at March-end. The same was highlighted by RBI’s annual report for the year 2017-18 which released yesterday. 

The report also showed that the volume of banknotes increased by 2.1 per cent and in value terms, the share of new Rs 500 and Rs 2,000 banknotes grew to a staggering 80.2 per cent of the total currency in circulation, as recorded at the end of March 2018.  

Other than that, the apex bank is also planning to introduce “varnished bank notes" to increase their lifespan and durability. However, it would initially be rolled out on a field trial basis, said officials from the RBI. 

Varnishing a note may help the top bank significantly save on printing costs as the process increases the lifespan and durability of currency notes, thus reducing the requirement for early replacement. At present, the RBI is just discussing the prospect with the government and a decision on the matter is expected soon.


Did India fail to push
digital payments after note ban?

Amrita Nair Ghaswalla
The Business Line
Published on August 31, 2018

Cash-in-circulation back to pre-demonetisation levels,
finds USAID-Intellecap study

Mumbai, August 30:  Cash continues to be king in India and still reigns supreme for payments across the country with digital payments having failed to sustain their growth rate after demonetisation. A USAID-Intellecap study has found that the level of cash-in-circulation is back to its pre-demonetisation levels.

The situation is more intense in rural India, where a preference for cash-only transactions across the rural value chains has been noticed, largely due to the inter-connected nature of the rural economy

“Afer demonetisation in November 2016, the shift of urban consumers and merchants to digital payments was not instant or even streamlined,” said Himanshu Bansal, Project Lead at Intellecap, part of the Aavishkaar-Intellecap Group.

The report is commissioned by USAID and enabled by Intellecap. People battled several fears, he continued, of losing cash to incorrect transactions, and not having enough merchants with the facility to accept digital money. This process was more tedious in rural India, and especially with rural women “who have not been exposed to the level of technology and education as their urban counterparts”.

“The challenge in rural India was significantly accentuated. It was a technological challenge,” Bansal told BusinessLine . “Even as customers in urban India were struggling for cash, the situation was piquant in rural India, where even the likes of Paytm did not have anything during demonetisation. There were no clear merchant distribution networks.”

People in rural India had to visit their bank branches, 15-20 km away, and spend the entire day there to get cash, he said.

Two months later, however, as cash started becoming available, people happily went back to cash transactions.

He went on to add the first signs of resurgence of cash were seen as early as January and February 2017, two months after demonetisation, as cash availability improved across banks.

In February 2017, the volume of transactions using digital channels had significantly decreased compared to December 2016.

The USAID-Intellecap study, shared exclusively with BusinessLine, corroborates this, showing the total volume of digital transactions had fallen by 20 per cent after the initial spike between December 2016 and February 2017.

Rural India

Asked if the entire exercise of Digital India had failed in rural India, Bansal said: “The entire infrastructure of digitisation in rural India is coming together now, with the advent of various digital payment banks such as Airtel and Paytm, who have a huge focus on acquiring rural customers. There is a huge push now to drive that.”

However, he added: “UPI is still a little inconvenient because of the phone factor. Most of the rural customers have feature phones or basic phones, and the only way you can transact is through USSD (Unstructured Supplementary Service Data) platforms, which have not worked in India.

“If it had worked here, then we could have had the same level of impact mPesa had in Kenya. Better USSD penetration would have allowed rural customers to transact freely.”

USSD is a payment mechanism that allows basic feature phones to be used as a platform for money transactions.


Demonetisation helped reduce
cash transactions: Niti Aayog

The ET-Now News
Published on August 30, 2018

New Delhi, August 30: Demonetisation of high-value currency in November 2016 helped reduce cash transaction and encouraged digital payments, Niti Aayog Vice-Chairman Rajiv Kumar said on Thursday. As per the RBI Annual Report released yesterday, 99.3 per cent of the demonetised Rs 500 and Rs 1,000 notes were returned to the banking system.

At the time of demonetisation, which among other things aimed at checking black money, about 86-87 per cent of the total currency in circulation was in the form of Rs 500 and Rs 1,000 notes. "Who said the aim of demonetisation was to get back less money? Demonetisation has impacted the markets and market psychology. How much transaction used to take place in cash (before the note ban), and what is the position now?", Kumar said replying to media queries on the sidelines of an event.

To another question, he said the government was committed to fiscal discipline and pointed out that the Prime Minister resisted the pressure to cut down excise duty on fuel while the oil prices were on rise. He further said that retail inflation, which includes fuel and food, is lower than core inflation.

"So inflationary impact of an oil price rise, or that of minor exchange rate decline is not that high, because there can be a supply response to that. Inflation is well under control. We are constantly on vigil on these issues," he added.

On November 8, 2016, Prime Minister Narendra Modi had announced the demonetisation of high-value currency notes. Of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes in circulation on November 8, 2016, when the note ban was announced, currency worth Rs 15.31 lakh crore has returned to the banking system.


₹100 note more likely to be a fake
than any other, says RBI report

Shayan Ghosh
The Mint
Published on August 31, 2018

Mumbai, August 30:  The ₹100 note is the most counterfeited Indian currency, with its popularity among forgers having surged since the government invalidated high-value banknotes about two years ago to curb the menace of fake notes and unaccounted wealth.

Around 46% of counterfeit currencies (by number of banknotes) detected by banks in the year ended 31 March was of ₹100 denomination, while counterfeit notes of ₹2,000 and ₹500 put together were at 29% of the total pieces, according to the Reserve Bank of India’s (RBI) FY18 annual report.

In the previous year, ₹500 notes were the most counterfeited, accounting for 41% of all fake currencies detected.

The withdrawal of the ₹500 and ₹1,000 banknotes in November 2016, however, seems to have put the brakes on counterfeiters, with detection of fake notes dropping 31% in the year ended 31 March from the previous year, the annual report said.

However, there was a rise of 35% in counterfeit notes detected of ₹100 denomination from a year earlier.

There was also a 154% surge in counterfeit notes detected in the denomination of ₹50, the central bank said in its annual report, indicating forgers have started targeting lower-denomination notes post demonetization.

For the series of banknotes in the denominations of ₹500 and ₹2,000 introduced after demonetization, counterfeit notes detected during 2017-18 jumped to 9,892 and 17,929, respectively, from 199 and 638 in the previous year.

State Bank of India (SBI), in its 29 August research report Ecowrap, said RBI’s promise that new currency notes of ₹200 and ₹500 (post-demonetization) are more secure and less prone to counterfeiting is not entirely correct.

“There was a noticeable increase in counterfeit notes detected in the denomination of new ₹500 and ₹2,000 (by 2,710%),” RBI’s annual report said. “Given the current trends, it is expected that the number of counterfeit notes in the denomination of ₹500 (new) and ₹2,000 may increase further and RBI/banks/public should pay more attention to that.”

During 2017-18, 522,783 pieces of counterfeit notes were detected in the banking system, of which 63.9% was detected by banks and the rest by the central bank.

The number of fake Indian currency notes detected by the central bank increased to 36.1% of the total detected notes in fiscal 2018, compared to 4.3% during the previous year.

The central bank attributed this increase to the processing of a large volume of specified banknotes withdrawn from circulation owing to demonetization.

Source: Internet Newspapers and Anupsen articles


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