Govt denies fake notes in currency wads issued by Banks

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New Delhi, Mar 18 (UNI) The Government today denied that wads of currency issued by banks to customers contain counterfeit notes.

Replying to supplementaries in the Rajya Sabha, Minister of State for Finance Pawan Kumar Bansal also denied that customers were being harassed by banks in case they tried to return the fake notes in currency bundles issued by them.

''Banks do not give fake notes and if any such case is reported, it should be brought to the Ministry's attention. Customers are not harassed,'' he said in reply to questions by RJD member Rajniti Prasad and SP member Virender Bhatia which drew strong objection from members across party lines.

''In case fake notes are found in remittances from currency chests, entire amount to the value of the counterfeit notes will be debited to the bank's current account and penal interest levied on the amount,'' he explained.

The Minister said instances of ATMs having counterfeit notes had been reported and RBI in July 2007 had issued two master advisory circulars to banks regarding this.

''The total loss to the exchequer due to counterfeit notes was Rs 4 crore last year and 12,620 FIRs were registered in this regard last year. The numbers of such cases is very small. I assure the House that the situation is not alarming ,'' he said while informing the House that RBI had received 7 complaints regarding dispensing of fake currency by ATMs of Central bank of India, Indusind Bank, State Bank of India, HSBC, ABN Amro, ICICI and IDBI.

Mr Bansal said bank officers are being trained to detect fake notes as per RBI guidelines. He also ruled out the involvement of any foreign agency, including Pakistan's ISI, in fake notes being found in ATMs to destabilise the economy.

''There is a no evidence to this effect and border transactions have no role to play in this,'' he added.

About RBI circulars to check circulation of fake notes, the Minister said banks had been advised that each note, which was suspect or found to be counterfeit should be branded with a stamp of 'Counterfeit Banknotes, and be forwarded to police for investigation.

The RBI has also directed banks to install Note Sorting Machines at branches having large cash transactions, located on international border areas and where large counterfeit notes have been detected frequently, he added.

''Besides, it has asked them to ensure that they stock their ATMs with good quality genuine notes only,'' he added.

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