RBI Admits No Fake Notes Have Turned Up So Far

The Reserve Bank of India has said that so far no fake currency notes have been detected among the Rs. 500 and Rs. 1,000 currency notes deposited with the banks after their demonetization was announced in November 2016.

The central bank was responding to a Right to Information (RTI) query from Mumbai-based activist Anil V. Galgali. In his RTI filing, Galgali asked the RBI to provide details of the number of fake notes received so far or their value within the time period of Nov. 8 and Dec. 10, along with information like the banks where the notes were received and dates of receipt.

The reply which was provided by the RBI's Department of Currency Management (Forged Note Vigilance Division) said that there was currently no confirmed data on the matter.

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On Nov. 8, the Indian government announced that it was demonetizing the two high denomination notes resulting in them becoming illegal tender overnight. Reasons given for the sudden move were curbing corruption, eliminating black money and flushing out counterfeit currency often used for terror financing.

In a statement Galgali said,

However, the RBI has made it clear that nearly 11 weeks later, it has simply no data available on this crucial aspect. So the government's claims to demonetize as a weapon to kill fake currency are proving hollow. The RBI's replies make it obvious that the government has failed in this endeavour or raised the bogey of fake currencies merely to implement demonetization. It’s now up to the PM to declare the figure/value of counterfeit notes recovered, in national interest

The RBI has refused to answer other RTI queries regarding demonetization such as one asking for details of the consultations held by Prime Minister before announcing the demonetization. The Prime Minister’s Office also refused to disclose whether the Finance Minister and the Chief Economic Advisor were consulted before taking the decision.

According a report last week, the RBI is still not clear how much of the scrapped notes were in circulation when they were demonetized.

In a submission made to Parliament's Public Accounts Committee (PAC) by the central bank it said that the exact number of notes withdrawn from active circulation is still being worked upon. The RBI stated that the process of physical verification and reconciliation was ongoing.

However Minister of State for Finance Arjun Ram Meghwal informed the Parliament via a written response in early December that 6858 million pieces of 1000 notes and 17165 million pieces of 500 notes totally worth Rs 15.44 lakh crore were in circulation on Nov. 8 which is not helpful as two different reports are being submitted.

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