COUNTERFEIT NOTES

Recently, the Ministry of finance has informed Lok Sabha that the value of counterfeit currency in the banking system reduced from Rs 43.47 crore in 2016-17 to about Rs 8.26 crore in 2021-22.
Counterfeiting, manufacture of false money for gain, a kind of forgery in that something is copied so as to defraud by passing it for the original or genuine article.
Because of the value conferred on money and the high level of technical skill required to imitate it, counterfeiting is singled out from other acts of forgery and is treated as a separate crime under section 489A of the Indian Penal Code.
Counterfeiting is the oldest technique used by fraudsters to cheat unsuspecting individuals of their money.

Threats of Counterfeiting

FICN (Fake Indian Currency Notes) can be seen as a form of “economic terrorism” practiced by external sources to damage India’s economy.
Economic terrorism refers to the behind-the-scenes manipulation of a nation’s economy by state or non-state actors.
The circulation of FICN threatens India’s economy while the profit that is earned from doing so is used to fund covert activities targeting India.
The circulation of a large amount of fake currency increases the amount of money in circulation, which may lead to high demand for goods and commodities.
The rise in demand in turn creates a scarcity of goods, leading to a rise in the priceof the goods.
This leads to currency devaluation.
The non-reimbursement policy of banks is another issue that occurs when banks reject the fake notes and do not reimburse the losses.
Firms which are involved in daily cash transactions face heavy losses in the long run thanks to the infiltration of FICN into the economy.

SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT

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