Counterfeit notes and Utkarsh
- July 25, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Counterfeit notes and Utkarsh
Subject: Economy
Section:
Context: Counterfeit notes are on the rise along with the increasing trend of currency notes in circulation, according to the data available from the Finance Ministry, Reserve Bank of India, and National Crime Record Bureau.
Though there is a rise in digital payments, still the currency note in circulation is going up.
The demand for currency notes depends on factors such as the expansion of the economy, interest rates and inflation.
Though the use of digital means in transactions has surged, cash transaction is at a significant level, which necessitates demand for currency notes.
Cash transactions at a high level also provide some opportunity for fake notes, and this could be one reason for cases of such notes rising.
Currency in Circulation (CiC) refers to currency notes and coins issued by the central bank within a country that is physically used to conduct transactions between consumers and businesses. Thus, Currency in circulation comprises of:
- currency notes and coins with the public
- cash in hand with banks.
Monetary aggregates
In the money supply statistics, central bank money is M0 while the commercial bank money is divided up into the M1 and M3 components. M2 and M4 components also include Post-Office deposits as well.
- Reserve Money (M0):-Reserve money is also called central bank money, monetary base, base money, or high-powered money. In the most simple language, Reserve Money is Currency in Circulation plus Deposits of Commercial Banks with RBI.
Mo = Currency in circulation + Bankers’ deposits with the RBI + ‘Other’ deposits with the RBI
- M1 (Narrow Money) =Currency with the public + Deposit money of the public (Demand deposits with the banking system + ‘Other’ deposits with the RBI).
- M2=M1 + Savings deposits with Post office savings banks.
- M3 (Broad Money) = M1+ Time deposits with the banking system
Concept:
Security Features of Indian Banknotes:
- Watermark-
- The Mahatma Gandhi Series of banknotes contain the Mahatma Gandhi watermark with a light and shade effect and multi-directional lines in the watermark window.
- Security Thread-
- The security thread appears to the left of the Mahatma’s portrait.
- Notes issued prior to the introduction of the Mahatma Gandhi Series have a plain, non-readable fully embedded security thread.
- Latent Image-
- On the obverse side of Rs.1000, Rs.500, Rs.100, Rs.50 and Rs.20 notes, a vertical band on the right side of Mahatma Gandhi’s portrait contains a latent image showing the respective denominational value in numeral.
- The latent image is visible only when the note is held horizontally at eye level.
- Micro lettering-
- This feature appears between the vertical band and Mahatma Gandhi portrait.
- It contains the word ‘RBI’ in Rs.5 and Rs.10. The notes of Rs.20 and above also contain the denominational value of the notes in micro letters.
- This feature can be seen better under a magnifying glass.
- Intaglio Printing-
- The portrait of Mahatma Gandhi, the Reserve Bank seal, guarantee and promise clause, Ashoka Pillar Emblem on the left, RBI Governor’s signature are printed in intaglio i.e. in raised prints, which can be felt by touch, in Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000 notes.
- Identification Mark-
- A special feature in intaglio has been introduced on the left of the watermark window on all notes except Rs.10/- note.
- This feature is in different shapes for various denominations (Rs. 20-Vertical Rectangle, Rs.50-Square, Rs.100-Triangle, Rs.500-Circle, Rs.1000-Diamond) and helps the visually impaired to identify the denomination.
- Fluorescence–
- Number panels of the notes are printed in fluorescent ink.
- It can be seen when the notes are exposed to ultraviolet lamps.
- Optically Variable Ink-
- This is a new security feature incorporated in the Rs.1000 and Rs.500 notes with revised colour scheme introduced in November 2000.
- The numeral 1000 and 500 on the obverse of Rs.1000 and Rs.500 notes respectively is printed in optically variable ink viz., a colour-shifting ink.
- The colour of the numeral 1000/500 appears green when the note is held flat but would change to blue when the note is held at an angle.
- See through Register–
- The small floral design printed both on the front (hollow) and back (filled up) of the note in the middle of the vertical band next to the Watermark has an accurate back to back registration.
- The design will appear as one floral design when seen against the light.
Legal provisions against counterfeiting–
Printing and circulation of forged notes are offences under Sections 489A to 489E of the Indian Penal Code and are punishable in the courts of law by fine or imprisonment or both.
Utkarsh 2022
- RBI formulated “Utkarsh 2022” in 2019 to achieve excellence in the performance of RBI’s mandates and strengthening the trust of citizens and other institutions.
- It is a medium term strategy in line with the global central banks’ plan to strengthen the regulatory and supervisory mechanism.
- To monitor the implementation of Utkarsh 2022, RBI created medium-term vision statements.
- The Medium-term Vision Statements set out the following:
- Excellence in performance of statutory and other functions;
- Strengthened trust of citizens and other Institutions in the RBI;
- Enhanced relevance and significance in national and global roles;
- Transparent, accountable and ethics-driven internal governance;
- Best-in-class and environment friendly digital as well as physical infrastructure; and
- Innovative, dynamic and skilled human resources
- These statements are meant to guide the RBI during the medium-term period i.e. between 2019-2022.
- The progress of Utkarsh 2022 RBI is maintained by a sub-committee of the Central Board.
- Objectives of Utkarsh 2022
- To support India’s macro-economic stability and to strengthen the internal and external value of the Indian Rupee.
- To promote consumer protection and ensure the stability of the financial system.
- To support markets and institutions that fall within its scope.
- To make the financial and payment systems more efficient and competent.
- To manage currency and banking services to the Government and its banks.
- To ensure a balanced and sustainable economic development of the country.
- To avoid any IL&FS debt defaults.