Did demonetization fail to check fake notes too? Counterfeits end up in bank accounts!

In the panicky rush after demonetization, fake notes may have also made it to the accounts.
Fake currencies worth Rs.8.78 lakh reached SBT in Kerala after the currency ban.
The details of counterfeit notes reached in other banks after demonetization are yet to be ascertained.

Amid reports that huge amount of black money turned 'white' after demonetization, reports suggest that counterfeit notes worth many lakhs might also have ended up in bank accounts in Kerala alone.

When the State Bank of Travancore, one of the major nationalized banks in the state, took stock after the deadline to submit demonetized currencies was over, the officials found that fake currencies worth Rs.8.78 lakh reached the bank after the currency ban. The details of counterfeit notes reached in other banks after demonetization are yet to be ascertained.

Even though the counterfeit notes received at SBT branches are only a negligible amount when compared to the demonetized notes worth Rs.12,872 crores deposited in the bank after 8 November 2016. In the days following the surprise announcement of currency ban, banks witnessed a panicky rush to exchange the banned notes of Rs.500 and Rs.1,000. Under pressure, many banks might have let fake currencies evade strict checks, officials confess.

As per the norms, the banks used to report to the police whenever a person brought five or more fake currency notes. But many rural banks had only one counting machine and the hands at the cash desk were under tremendous pressure after demonetization. Hence, fake notes must have made its way into the bank accounts, evading the examination.

The fake notes identified before they get deposited would now go the cash chests of RBI. But what about the counterfeits that made it into the bank accounts? Unfortunately, there is no way to find them out!

Also read: Fake currency mafia pumped ₹ 16,800 cr into Kerala economy!

Directorate of Revenue Intelligence (DRI) had found that the tentacles of the fake currency network were so deeply rooted in Kerala that it operated a parallel economy in the state. A review report of the directorate calculated that the Hawala mafia pumped in fake notes to the tune of ₹ 16,800 crores in the past 25 years in Kerala. But the government agencies and banks managed to recover counterfeit notes worth ₹ 1,000 crores only.

Also read: Did ₹200 cr black money land in Kochi? Central agencies on high alert!

In a written reply in Rajya Sabha in August last, the Minister of State for Finance Arjun Ram Meghwal informed that the fake Indian notes in circulation was found to be about Rs 400 crore.

In the heated debate on demonetization, the BJP and the CPM locked horns over the problem of fake notes in Kerala. Replying to criticism raised by the state Finance Minister Thomas Isaac on the logic of demonetization, the BJP had stated that the minister was trying to defend fake currency mafia thriving in Kerala.

Also read: 'Container fake note' debate between BJP, CPM turns ugly in Kerala

Alleging that containers of fake notes had reached Kochi Port, the BJP had challenged state government to reveal the details of the probe into it.

Let the 'surgical strike experts' investigate and find out the counterfeit notes, was the response to it from Thomas Isaac.

Last Updated Mar 31, 2018, 6:44 PM IST