The Telegraph
Since 1st March, 1999
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Fake notes' No problem if you’re a prize client

Calcutta, April 30: Saddled with a forged 500-rupee note' It could have been put back into circulation with the knowledge of a bank.

Lest they lose big accounts to competitors, both private and nationalised banks return counterfeit notes to big depositors — and thereby back to circulation — though banking rules say the notes should either be defaced or destroyed. Senior bankers say it is a facility they secretly give to “valued customers”.

In one example that illustrates how the system works, cashiers of one of the largest nationalised banks in the country say they detect at least three counterfeit notes among the weekly deposits of a utility major, which has an account with the bank.

The utility provider, which receives large sums in cash from consumers, deposits more than Rs 50 lakh in cash with the bank every day. “Sometimes, we would receive half-a-dozen counterfeit notes a week. Most of these are Rs 500 notes, but sometimes we would receive forged notes of Rs 100 and Rs 1,000 as well,” the cashiers say.

All these notes are returned without being defaced, as demanded by the utility major. “If we do not oblige, they would take the account away. So we return the counterfeit notes for being replaced instantly. We keep no records and the practice doesn’t hurt us,” says a senior employee of the bank.

Cashiers of the utility major say they receive lakhs of rupees in payments every day and do not have proper devices to detect counterfeit notes.

“A seasoned cashier would normally detect a forged note by pressing it between his thumb and index finger while counting. But given the volume of notes that we count every day, some would inevitably slip through our fingers,” they point out.

As each bundle is stapled, bound and signed, the cashier responsible for the miss can always be traced. “If the bank destroys the note, the cashier will have to bear the loss. You cannot expect us to take a Rs 1,000-hit every month,” they say.

To ensure that a returned counterfeit note does not come back stashed in a different bundle, the bank puts a small sign on it that an untrained eye would not notice. But bank employees say the utility major has never tried to “swindle” them by sending such a note back. “They somehow manage to push them back into circulation through other channels,” they point out.

Traders also benefit from this bank-customer arrangement, which is quite common in branches located in the business district of the city or those that have a large number of traders’ accounts. This effectively means hundreds of counterfeit notes are being pushed back into circulation every week.

Senior bankers blame it on competition, but also point to defects in the system. “You cannot reasonably expect a cashier counting thousands of notes a day to unfailingly detect all forged notes. They should be insured against the financial loss arising out of such a miss,” they say.

At times, bank cashiers themselves accept forged notes by mistake. In such cases, the bank’s corporate clients who benefit from the bank’s blind-eye practice help it get rid of those notes.

The real loser is the common man. Back in circulation, when these counterfeit notes land in the hands of an ordinary account holder, they are most likely to be defaced when he goes to his bank to make a deposit. After all, he does not fall in the category of a “valued customer”.

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