As fake currency continues to be pumped illegally into the country, a latest government report states that there has been a 400 per cent increase in such counterfeit transactions in Indian’s financial channels.
The report, compiled by the Financial Intelligence Unit (FIU) under the Union Finance Ministry states that during 2010-11 financial year (till March 2011), the agency detected.
“4,23,539 incidents of Fake Indian Currency Notes (FICN) with a face value of over Rs 35 crore.”
Such reports, called Counterfeit Currency Transactions (CCRs) in financial terms and sent by public and private sector banks to the FIU under provisions of the Prevention of Money laundering Act (PMLA), were 1,27,781 incidents during the 2009-10 fiscal.
The menace of fake currency being stealthily introduced in country’s banking and other financial sectors are reported regularly and the extent of the evil again came to the fore recently when a Delhi Police Special cell team seized fake currency with a face value of Rs 2.24 crore and arrested two persons.
The FIU report also revealed that the Rs 500 denomination notes bear the maximum brunt of counterfeiting in the country.
“Rs 500 denomination notes constituted the bulk of CCRs at 60.74 per cent. There was (also) a rise in the number of Rs 1,000 denomination counterfeit notes reported in the year 2010-11,” the report said.
The FIU, a central agency for receiving, analysing and disseminating data related to doubtful transactions, also reported that with 37,907 reports of suspect terror-financing and rationale-less transactions, country’s banks and financial institutions reported a 300 per cent escalation in detecting Suspicious Transaction Reports (STRs).
The STRs, which gave rise to a reasonable ground of suspicion that the transaction may involve the proceeds of crime or financing of activities related to terrorism or were made in circumstances of unusual complexity, increased three times in 2010-11 as compared to 10,067 in 2009-10 fiscal.
The FIU report, submitted recently to the Finance Ministry, stated that “private Indian banks contributed majority of CCRs”.
“The phenomenal increase in use of counterfeit currency and suspicious transactions underline the fact that fake notes and malafide movement of funds is on the rise in the country.
“The FIU is continuously alerting agencies like the CBI, Enforcement Directorate, Customs, Narcotics Control Bureau and special police units to act on these instances under the stringent laws that they enact to curb terror financing and tax evasion within the country and in offshore deals,” a senior Finance Ministry official said.
While a CCR is equivalent to details of an instance of counterfeit currency detected by a bank, an STR includes details of all accounts, transactions, individuals and legal persons or entities related to a suspicious transaction.
