Citizens' Issues
Counterfeit currency—the new pandemic

The “funny money” problem in India is no longer a minor bump; it is severe, it is suspected to be much more than the readiness to blame ISI of Pakistan, and requires a total overhaul of the laws pertaining to counterfeit currency

I usually pay for fuel by card at my regular filling station, but needing some at an unfamiliar pump at a remote location outside Delhi a few days ago, chose to pay by cash. What came out of the wallet first was a brand new thousand rupee note, which I handed over to the attendant. He looked at my unkempt hair, dirty clothes and the dented and highway dust-encrusted car, and then I saw some hesitation in his eyes, he then looked at the mint condition of the thousand rupee note again, and asked me if I didn’t have a used note, or hundred rupee notes, or would I not want to use my card instead?
Has something like this happened to other people, too?
The seizure by the Indian authorities in Delhi of Rs6 crore worth (or much more, according to another source) of counterfeit Indian currency, apparently in mint condition and reportedly brilliantly perfect in all respects when compared to the real currency, finally proves what the grapevine has known and whispered about all the time. That the “funny money” problem in India is no longer a minor bump; it is severe, it is suspected to be much more than the readiness to blame ISI of Pakistan, and requires a total overhaul of the laws pertaining to counterfeit currency, amongst other things.
As background, being seafarers, we were always aware of as well as taking precautions on getting saddled with fake currency notes globally. Junk value East German marks being passed off as hard currency West German marks was something all of us had been warned about, but it still did not prevent traders trying to palm them off on us, in all parts of the world. Shipping Corporation of India owned and operated a passenger ship named ‘CHIDAMBARAM’ of all things, which was well known for being used by fake currency smugglers from the Far East into ports along our East Coast.
Oh yes, we developed a nose for this stuff early on in life, when most people our age were still surviving on pocket money from their Mummy-ji and Papa-ji. We got stuck with bad money, we had no mummy-papa; we were in trouble—simple as that.
In addition, the Goa-Karnataka-Maharashtra triangle, roughly bordered by Kolhapur on one side and Hubli-Dharwad on the other, was made famous by Telgi of Khanapur fame—the business here of fake currency notes being a legacy of the colonial ex-rulers of Goa and the politics therein. Likewise, the opening up of land borders in Rajasthan, the rapid growth of private ports in Gujarat, the shift in opium trade patterns and most of all, the rampant growth of this ‘business’ in the border districts of Uttar Pradesh adds to the ‘traditional’ suspect routes from the Persian Gulf and Far East countries. Add the hill tracts and delta of the Padma to this, and you suddenly have a situation where the attack from all sides is now really serious and terrible for the nation.
So far, however, it was in the realm of people in the cash business, the black economy.
But now, it appears to be reaching the corporate world too—DeLorean was one example of a top-end business-person who got mixed up in the narcotics and counterfeit currency business to try and rescue his business. Closer home, the activities of Ponzi schemes of the SpeakAsia sort as well as assorted ‘savings schemes’ offering high rates of return barely hide the role of counterfeit money being used for pay-outs, what better way of spreading this currency wider?
And then, with the ongoing slowdown impacting droves of first generation business-people nationwide, the lure as well as squeeze of using funny money to get out of sticky situations is reaching epidemic proportions. One ‘system’ doing the rounds apparently works like this, if you are a businessman who is in debt, and wants to bail out, then the loan sharks you owe money to approach you, put the squeeze on you, and you:-
1) Provide some sort of collateral, say Rs5 crore worth of property, gold, or anything tangible. Use that to get liquidity of genuine money, white or black. This amount is used for a supposedly genuine purpose and sent out of the country.
2) The genuine funds now sent out are ‘invested’ in funny money with a “face value” to the tune of about two-and-half to three times this amount.
3) After 45-60 days, once the ‘shipment’ is received, the original collateral is returned, along with an equal amount which is adjusted against the debt.
4) The rest of the profits are also kept by the people running this racket.
5) All this is in counterfeit money.
Obviously, such things are not cast in stone, but this is broadly how it works. The risk with the genuine collateral, of course, is if things go wrong. The counterfeit currency gets out into circulation by one means or the other—and here too—the role of a variety of private agencies in the business of stuffing of ATMs as well as currency chests in some parts of the country are not above suspicion.
The bigger issue here is that the law as it stands today makes a criminal out of the person who is the last in the chain, usually the innocent citizen saddled with a dud currency note, even if he took it out of an ATM a few minutes ago. That is the major change needed, if we really want to fix the issue, especially as the nation heads towards elections. Things are so bad that some young people who got in touch with this correspondent to develop their own counterfeit detecting machine were simply unable to do so, because the risk of running trials on real fake money were too high for them.
We have to change the laws, those who find counterfeit money ought to have the legal protection if and when they approach the authorities, instead of being prosecuted, as things stand with the current dispensation. Or we shall see even bigger seizures taking place.
 (Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)

Previous articles on the subject, at Moneylife:




6 years ago

A suggestion that has been going around for over a decade is to encourage greater use of credit/debit cards for payments esp towards capital and white goods. This would have meant reduction in need for paper money , faster and better collection of indirect taxes and countering the fake money problem. It may be worthwhile giving a minor tax rebate if payment is made by card. What can be preventing the govt from implementing this?


6 years ago

in this country, full of miles of rules & regulations, common sense is never used by those who are running the SHOW!

all countries have problem of counterfeit notes. but sensible ones know how to deal with problems. this stupid country, run by senseless people, dont even know what to do with any problem! but they are world champions, with no competition even from hard core communists like north koreans & burmese,

take the new coins! senseless honchos in a country of 1.2+ billion have no tenacity to even think HOW THE HELL THEY CAN MINT NEW COINS OF RE.2 LIKE OLD RE.1 AND RE.1 LIKE OLD 50 PAISE?!?!?





6 years ago

Our govt. and the top bureaucracy are indeed not so naive as to feign ignorance of how and where all this is emanating. This is no ordinary, petty crime-this needs well organised, state-of-the-art technology and hence huge investments and only the most influential can operate as the kingpins. The people caught are essentially expendable and mere carriers. The real problem in India is that the wellmeaning nd honest are not assigned the task to keep watch on the elements becoming rich suddenly, overnight. One should not be surprised to know that many top bureaucrats also enjoy the benefits of this racket, may be unknowingly. Politicians, of course, are very much in the loop of the "gang".



In Reply to A B 6 years ago

Dear AB, thank you for writing in, and as the saying goes - one small candle lights a corner of the room.

We keep trying.



6 years ago

Well... The prevalence of the black economy and participation by the very people who are not supposed to be part of it, prevents the authorities in India from taking any concrete steps to reduce the menace. The solution lies in electronifying payments across the country - and making it compulsory in semi urban and urban areas above a certain limit, say INR 1,000.

This obviously requires that people working in the unorganized sector are given their salaries or wages by way of electronic transfer and that people pay for their purchases by way of electronic transfer.

This is hampered by the high and multiple tax structure of our economy.
Our tax rates need to be rationalized and divided amongst more people. The successive governments have played populous cards to the hilt while milking existing tax payers.

Municipalities, states and central government taxes need to be setup in such a manner that the citizenry pays for the facilities they provide in a consistent fashion and in return are guaranteed good quality goods and services. The size of our populatio means that we do not high tax rates, we need more spread of tax payers.

Possibly all of this is utopian as our lawmakers have consistently muddled the waters by their explicit participation in the black economy. Schemes like NREGA, FSA, etc point to a controversy where they want to hand out fish to people without trying to teach them how to fish. If the same quantum of money is spent on improving the quality and increasing the spread of public schools by paying teachers fair salaries, India would be a changed country in a decade. Obviously this would result in slogans like GARIBI HATAO rendered pointless!!

You can imagine how everything is interlinked and how weakening institutions like police or bureaucracy through corrupt means has resulted in threats like counterfeit currency circulation amongst many others.



In Reply to Jingoindian 6 years ago

Dear JingoIndian ji . . .

Your well thought out response is highly appreciated.

Question arises - what can we do next, please?


Shadi Katyal

6 years ago

For years we heard the fear of CIA which turned out to be not that bad but our own fear. Now we have ISI and it is scaring the pants of us. In every aspect ISI is involved and we are just impotent to do anything.
For years counterfeit Stamp Paper has been sold by GOI without knowledge that her printing machines were sold and later the ink but what has govt done so far. What happened to the person involved.
One should ask how does all this happens only in India and why is India allowing ISI to furnish such counterfeit currency. We never hear any action being taken but just a small news.Pakistan can print Indian currency as can India or Paksitan so who is topping us to not furnish such currency to Paksitan..
Are we sure that like the Stamp paper this is not another in-house game being played???



In Reply to Shadi Katyal 6 years ago

Dear Shadi Katyal ji,

You are absolutely correct, and thank you for placing it so clearly.

One can be forgiven for thinking that certain elements who want the elections and therefore the selection of our lawmakers to go in a particular direction may well be behind this racket of counterfeit currency.


govind shanbhag

6 years ago

Veeresh Jee - God forbid - if you deposit one forged currency note of any denomination and so called expert bank official/teller was lucky enough to detect the forged note (of course to your ill luck) you had it. The procedure is customer who had deposited the note is not allowed to leave the bank and bank has to confiscate the note immediately. Then a sort of panchanama is required to be made and the bank official has to rush to nearest police station alongwith the customer. with the forged note after reporting the matter to currency derpartment of RBI. In Police station you are looked upon as a member of gang (they always feel so), keep you in the police station till evening and if you are lucky statement is taken on the same day. If concerned police official is required to some urgent such as escorting a politician some where, your full address, identity proof is taken and you are called on next day. You have to keep on visiting police station no.of times to lodge the complaint and ultimately you prefer to settle the issue once for all by pay something (much more than forged note). With such experience next time if you happen to get another forged note and caught, you and bank officials prefer to destroy the note rather than entering into laid down procedures. You are absolutely right, innocent customer who may have received the note in usual transaction is required to suffer.



In Reply to govind shanbhag 6 years ago

Dear Govind Shanbag ji,

Thank you for writing in.

Yes Sir, I am aware of the tribulations faced by ordinary people if caught with counterfeit currency, even when it is not their fault. There are some letters on the subject in the previous articles listed here which bring this out.

We must do something to change this, and it has to come from the people.

Good luck to us.



6 years ago

The crooks and certain underworldorganisations are creating conuterfeit currenceis of higher denomination. The only way to check them is examining the notes through machines .Another way is RBI should discontinue the present currency notes and insted issue fresh notes and discontinue the old notes .Genuine old notes should replaced from all banks and with records of the people upto certain amounts fromthe counters biger amounts should be credited to the bank accounts. This will also help to reduce the black money as the person exchanging the old notes have to give proper identification andwhen the amount involved is heavy sources can be asked and checked This will reduce the black money



In Reply to PCChacko 6 years ago

Dear PC Chacko ji,

Thank you for writing in.

The technology to "trap" counterfeit currency at various points along the transactions, for example at point of receipt in banks/ATMs/Post Offices, at point of dispensing in banks/ATMs/Post Offices, and at other high-cash transaction locations, exists and is not all that expensive either.

Why it is not utilised would be interesting to learn about.


FSSAI survey reveals 68% of milk samples tested were adulterated

Experts have called for more transparency in the entire process of testing and advocated testing of milk on a continuous basis

The recent survey on milk adulteration conducted by the Food Safety and Standards Authority of India (FSSAI) found that 68% of the tested samples did not conform to the set standards while some also contained detergent. Experts however feel that findings were expected and the survey has nothing new to offer. They called for more transparency in the entire process of testing and advocated testing of milk on a continuous basis.

Pritee Shah, chief general manger, Consumer Education and Research Centre  (CERC) and Editor of Insight , a consumer magazine, seconds the view. “There has to be mechanism for constant inspection. The checks and balances should be clearly defined. The survey itself shows that most of the samples were loose samples. So consumers should prefer packaged milk. When we had tested milk at CERC, it showed that packaged milk is better compared to loose.”

She adds, “Sometime back the health minister (MoS) Dinesh Trivedi had said cattle are injected with Oxytocin, a prescription drug, to boost milk production. Such milk would be harmful for our health. So there is clear need to conduct regular testing and inspections of milk.”

AR Shenoy, Mumbai-based consumer activists says that, “The findings are an open secret and are not new. What is the point in conducting a survey once in a year? Milk as a commodity is used on a daily basis, so there has to be continuous surveillance. The whole process has to be transparent with details like how and were the samples drawn? What is the peripherally used to test? What is the qualification of the person conducting the testing? The mechanism has to be overhauled.”

The survey was conducted across India, with total of 1,791 samples drawn from 33 states and Union Territories, to identify common adulterants like urea, detergent, skimmed milk powder, hydrogen peroxide, starch, etc. Out of the total tested samples, the FSSAI found 68.4% samples non-conforming to set standards of which 46.8% were deficient in fat and solid no-fat content (SNF) and 44.69% had skimmed milk powder (SMP). Detergent was found in 8.4% of the total samples.

Taking suo moto cognizance of the news reports on adulterated milk in the National Capital Region, the Delhi High Court (HC) issued a notice to Delhi government and the Centre seeking their responses.  

According to Ms Shah, consumer themselves should also be more educated and proactive in registering complaints. “Urban consumers have a misconception that packaged milk contains milk powder and preservatives and hence they go for local dairy milk, which is often adulterated with water. Consumers should also be proactive in complaining, on finding sour or spoiled milk—either packaged or loose, to a local food inspector or to any consumer organization. This is will help in curbing this menace by forcing the dairy owners to adhere to the set standards.”

“There is need for regular monitoring and awareness among the people. The new Food Safety and Standards Act, 2011 has a provision for summary trials where regular tests can be conducted,” V Sudershan Rao, a food safety expert at the National Institute of Nutrition, Hyderabad, said.




6 years ago

I am surprised to see Pondicherry UT in the list where it says that there is no adulteration. There is something wrong in the samples.Consumers knows more than these lab test. We are getting adulterated milk in Pondicherry.


6 years ago

Why not somebody develop a domestic test kit for synthetic milk and popularise it through media. This will prevent millions from suffering from consuming such adultrated/synthetic/toxic milk. Alternatively there can be test centers at every nook and corner in the country.


Vijaya B V

In Reply to Animesh 6 years ago

The words "somebody develop domestic kit" This is some thing like "Who has to bell the cat ?" Most of the NGO's are them self adultraed. Secondly if you think of Govt. agencies they remain like Paper Tigers without teeth. The depth of punishment has to be more severe & should followed very strictly. Does our politicians who are busy in amassing money do find time for common man's needs etc

The four horses

India is the fourth horse. We will begin to stir when the agony of inflicted poverty, the torture of corruption, the abyss of amorality, the absence of conscience and the sheer impossibility of our lives will make us begin to reclaim our humanity

Today I learned something.

From watching a TV show called the Body of Proof. I won’t get into what the show is about, except that I like it.

But at the end of this one episode, there was this quote from the Buddha.

“There are four horses.

The excellent horse moves before the whip touches its back.

The good horse runs at the lightest touch.

The poor horse doesn't move till it feels pain.

And then there is the very bad horse. It stays still until the whip penetrates its marrow.” 

In the running of our lives, we too are like these horses. 

Some of us see the ‘reflection of our own self’ before any prompting. We know that we are destined to be pure and great and good and whole. We need no goad to change. We are already running, running free towards the light.

I see some of us like this: the lovely young man with an endearing European accent who has dedicated his life to save gibbons in a tropical south Asian forest. I see his humility and feel his love for things that cannot help themselves but when they swing free from tree to tall tree, their grace makes his eyes swell with tears at the sheer wonder of creation. 

He has found his calling without prompting, just his heart calling to the giant beating soul of the forest.

Then there are some of us whose life is changed by a chance meeting with a walking inspiration who seems to have ‘manifested’ just for us, a reading of wisdom from a book written by our own minds but by someone else’s hands, a song of utter purity from a blind singer in a gurudwara before sunrise that asks us to bow and weep, or just the simplicity of the smile of a beggar who asks not for alms but for our eyes to meet hers with love. We feel the breath of grace and nothing but nothing is the same again: not the flight of an eagle in the clear blue sky, or the roil of thunderclouds at deep sunset or the laughter of a child swinging in his mother’s arms. We are molten.

I see some of us like this: The award winning molecular biologist who doffs his white lab coat for faded saffron robes and who lives as a Tibetan Buddhist monk near the Himalayas. It seems like he is walking not just on thin air but on it as he addresses a world conference of scientists and thinkers and doers on the substance of happiness: effulgence shining through.

And some of us are too busy to notice that the visitor at the door might be one of these messengers. Our lives are busy and we have things to do, and to-do lists to complete. We ask the silent mirror to tell us that we are the fairest in the land, and we answer the question ourselves with a toss of the head, a spray of perfume and a dash of mouthwash. And one day we find the mirror speaking, asking us questions in turn: what use have we made of the gifts we have been bestowed, why do we feel  empty inside in spite of filling ourselves with things and why are we alone? We feel the hurt of people who have used us and discarded us, we feel the emptiness of homes that are not laughing with children anymore, we feel the need for meaning. We begin to search. We ask for help sometimes from friends, sometimes from paid professionals, sometimes from self-help books, sometimes from spiritual teachers, sometimes we return to the fold of the church, we go on pilgrimages; we seek and seek and seek, because we now feel the pain. 

And here is the lovely reward: in just making the search, we are changed. We are filled with purpose and one day, one shining moment when we realise there is no end but just the journey, we can begin to gallop, the wind shouting hosannas in our ears.

I see some of us like this: The merchant banker who, on the wings of an epiphany, funds his own charitable foundation to help create meaningful change in poor urban society. When he speaks now, he has the unmistakable certainty of a missionary and the contentment of a fakir. He is rooted and free. He is rock in the river.

The fourth one is probably the most interesting. It is the one that pays back pain with pain, inflicts suffering on others because it is screaming with agony inside. It knows no mercy because it gets none in return. It asks not to be loved, just to be feared. It feeds off hate. It presumes its greatness because it feels so inadequate in itself. There is no light here, not even the one at the end of the tunnel, just the deadness of darkness. Do not ask this person to feel joy. This person can feel glee though, the evil cackle of victory. And morality has left this abode a long time ago, purposeless end not just justifying but dictating the means.

This is the substance of nightmares.

The Buddha meets one such person. This is his story:

There was a notorious murderer whose back story about he became one is in itself a tale unto itself. But when the Buddha met him he was feared and dreaded and known as Angulimala, one who wears fingers as a garland. He had 999 fingers collected as his gruesome trophies.

When the Buddha heard about Angulimala, he quietly left the Jetavana and set out for the Jalani forest, some 40 km away. As the Buddha walked along the road, groups of travellers passed him and as they did, they warned him not to continue alone because of the danger. He simply smiled and continued on his way. When Angulimala saw the Buddha, he was most surprised. “This is wonderful indeed. Usually only travellers in groups of twenty, thirty or forty come along this road and here is an ascetic travelling alone. I will kill him.”

Seizing his sword and shield, Angulimala emerged from the jungle and began to chase the Buddha, but although he ran as fast as he could, he could not catch up with the Buddha, who only walked. He put on a burst of speed but still could not get near the Buddha. Utterly bewildered, he shouted out: “Stand still, ascetic!”

The Buddha turned around and looked at him, and replied: “I am still. Why don’t you be still also?” Even more bewildered Angulimala asked: “What do you mean, ascetic?”

“I am still in that I harm no living being. You kill and therefore you are not still,” replied the Buddha.

The terrible things that he had done and the wretchedness of his life dawned on Angulimala and he broke down and sobbed. He threw down his weapons, bowed at the Buddha’s feet and asked to become a monk. The Buddha ordained him and together they set out for Savatthi.”

In time, it is said, Angulimala became one of the Buddha’s most respected disciples.

What does it take to achieve transformation? Does one have to be swamped in mire and then rise like the lotus?  Does one have to undergo the tribulations of Job to understand the nature of? As Dostoevsky says, “The benevolent indifference of the universe?” Or can we rise and take up arms against a sea of troubles and by opposing end them? Can we win the greater Jihad, the inner struggle against our own demons? What does it take to recognize where the fight lies? Will only suffering reveal the true nature of man, his inner perfect self?

Asoka the Great, considered by many historians to be the first unifier of India, had to see the destruction he wrought on his own people when he waged merciless and ambitious war before he saw the light. The suffering he caused on countless men women and children in the pursuit of power was so monstrous that when he could finally see what he had done, he became Buddha’s greatest servant forsaking violence and trying to create an equitable society based on the principles of Dharma enunciated by the Buddha. 

The whip had to cut to the marrow. The unspeakable horror of man’s cruelty to his fellow man led to one of the most renowned transformations in human history.

And why is this important to us?

Consider this: India is the fourth horse. 

And maybe one day the whip will cut to the marrow. We will begin to stir when the agony of inflicted poverty, the torture of corruption, the abyss of amorality, the absence of conscience and the sheer impossibility of our lives will make us begin to reclaim our humanity.

The stuttering of the Lokpal Bill gives me pause. It by no means is a panacea for what ails us. We will need to accost the Buddha on the road, as well. But the fact that the ‘fors’ and the ‘againsts’ have run the bill aground on the shoals of political expediency makes me less than optimistic that we not feeling the pain.

I can only hope. The Buddha in his infinite loving kindness believed that everyone and everything is worthy of redemption, given time.

India, I hope, has enough time for redemption.

Postscript:  Asoka’s seal, the three lions, is the official seal of India.

(V Shantakumar is the former chairman & CEO of Saatchi & Saatchi in India and now the managing partner of Doing Think)




Shadi Katyal

6 years ago

Lot has been written about poverty and how it is exploited but nothing is done about it. There are NGO who work in name of such poor people to see that they stay poor.That is INDIA where even the Govt refuses to ship food to poor areas and than there is greed where the quality grain is sold and poor quality provided. Where the labourer doesn't get paid but his thumb prints are taken under duress.
The second point of Corruption, it seems it is now in our genes.Poor people who cant afford rail tickets travel without it but is that not corruption and biggest crime is that well to do also take advantage and if caught give cash to officer and thus take advantage as the poor man. Is this something in our thinking or upbringing. Why do we try to be over smart.We have no concept of any right and wrong and only right is what we can pocket or save.
Morality now that is a what we talk of and never apply to our lives. Take case of bride3 burning or fetuses abortion of girls, are these moral acts?Maybe the nation has different meaning of morality.Trying to cheat and lie, is that anything to do with morality?We even lie ages when getting our marriages being fixed WHY? So where is our spirituality which we preach to the world.Where is our morality when we lie both politically and otherwise.
Now comes the quesion of Conscious, has anyone seen such thing and we beleive we do what our conscious tells us. If we can be bribed and bought that is our conscious asking to accept the bribe.
We talk and talk and I am sure to most of readers this might be rather crude and rude but sooner or later we have to face the reality.
Instead of looking inward we look forward to some new Messiah to do it for ourselves. We go to temples but do we follow Dharma or is this just to make fool of ourselves that we are spirituals.We saw how Dhongi Baba Ram dev who has foreign accounts and whose number 2 men has used false passport could fool the superstitious nation.People were happy that a new Messiah has come and solve the problems.
We dont want to modify our own character but look for others to do it. It takes each and everyone of us to take action.
Anna Hazare has been misled by a group who have the strings to pull him as we saw the grand group is not honest and pure but what can poor Hazare do unless we all are willing to introspect our own Conscious.
We have along way top go and time is running out to blamed the British and Muslim rulers. We have to stand up on our own feet and break this chain of corruption and girls burning and killings and refuse to pay a paisa to anyone as bribe.
Unless the nation s whole wake up we will be slowly demeaning our lives

surajit som

6 years ago

what we need is a vevekananda . yes there are good men. i read the story of many such persons in THE WEEK. they are doing it RIGHT NOW. but they are like drops in an ocean. we need millions of them. possibilities are endless. what is needed is action. spiritual hope alone will not solve out problems. and yes ,lets not lose hope. because that is will be the end.

Shama Zaidi

6 years ago

for a moment i thought you were referring to the 4th horse of the apocalypse!

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine)