Apart from soaring domestic interest rates, the Centre’s searing fiscal deficit, and high inflation coupled with lower growth, there is another threat to the Indian economy: a spurt in the smuggling of high-quality fake Indian currency notes (FICNs), estimated to constitute 10–20 per cent of all the notes in circulation. The National Investigation Agency (NIA) recently concluded that the new counterfeits, especially of Rs 500 and Rs 1,000 denominations, were scarily similar to genuine notes.
A committee of experts, formed by the Security Printing and Minting Corporation of India at the insistence of the NIA, found that freshly seized FICNs were printed on ‘regular currency-making… [and] sophisticated machines which are only available to sovereign nations and are manufactured by two or three manufacturers’. Most notes seemed to have originated from the same printing press. Even the paper used was 100 per cent rag, a genuine currency material.
What has worried investigators is that several of the security features of a legal note ‘have been almost-perfectly copied in the seized FICNs’. The silver security thread, visible when a note is held against light, was inserted during the manufacturing stage and, therefore, looked genuine. The fakes had what is called ‘See Through Registration’, which ensures that the floral designs printed on the front and back of the note overlap and coincide with each other when viewed against light.
Despite these similarities, the NIA could pinpoint the culprits responsible for the printing of FICNs. When it compared the Indian fakes to authentic Pakistan currency, the agency found that the paper used in both had the same weight, PH value, wax quotient and poly-vinyl alcohol coating. The printing of both was done on a similar super-Simulton, dry-offset press. Indian mints don’t use either this paper or printing process. What’s more, most of the fakes had the same minor defects, which implied that they came from the same source. So, the needle of suspicion pointed towards Pakistan. Since the large-scale circulation of FICNs can damage the credibility of the rupee—and the economy—India has decided to introduce new security measures in its latest series of notes that will soon hit the market. These notes will limit the use of imported paper, be largely made of domestically procured material, and carry the new rupee symbol. However, given the cleverness of cross-border counterfeiters, they may be able to copy these features as well.