US Exim agrees to guarantee loan for R-ADAG’s Sasan project

The approval would result in saving about a 1000 jobs in the US. Jobs are believed to have been behind Exim Bank's reversal of earlier decision of rejecting the arrangement

Responding to green commitment from Reliance Anil Dhirubhai Ambani Group (R-ADAG), the US Export-Import (Exim) bank today gave a preliminary approval for $600 million in loan guarantees to the supplier to Rs20,000-crore power project at Sasan in Madhya Pradesh, reports PTI.

The proposed estimated Rs2,800 crore loan guarantee will support the sale and export by US firm Bucyrus International.

The approval would result in saving about a 1000 jobs in the US. Jobs are believed to have been behind Exim Bank's reversal of earlier decision of rejecting the arrangement.

"This transaction was also made possible because of Anil Ambani's leadership and vision in diversifying Reliance Power's (R-Power) production portfolio of energy projects in India," Exim Bank chairman and president Fred P Hochberg said in a statement soon after a board meeting.

Commenting on the development, Bucyrus International president and CEO Tim Sullivan said: "We are confident that the remaining steps of this process, including financial review, will be completed expeditiously in order to allow Reliance Power to proceed with its project plan."

The Exim Bank of US reversed its earlier decision and approved the financing arrangement after R-Power committed to cap the emission from the about 4,000 MW project to 850 grams of CO2 per kilowatt hour.

Besides, the firm also agreed to develop a 250 MW renewable energy facility in India.

"We are pleased that Reliance is making this commitment to renewable energy, which allows us to sustain US jobs and promote both conventional and renewable energy exports," said Mr Hochberg.

The bank said the board of directors has approved a full financial, technical and environmental review of an application by R-Power for financing its coal-fired power plant.

R- Power's application is, however, still subject to final review and approval, it said.

On the other hand, Mr Sullivan said: "On behalf of all the employees of Bucyrus, we would like to praise the US Exim Bank for approving the environmental aspects of the R- Power Project application, which will allow us to provide mining equipment to the Indian project moving forward."

This is the first step in the process to provide financing, which will create nearly 1,000 jobs across 13 states in the US, as indicated by a study conducted by the Metropolitan Milwaukee Association of Commerce, he added.


Govt asks RIL to cut supplies to fertiliser, power plants

The Centre has directed RIL to make a "pro-rata" cut in gas supplies to all existing customers if production from its KG-D6 field cannot support new customers so that new users like Essar Oil's Vadinar refinery can be given gas from its KG-D6 fields

The government has asked Reliance Industries (RIL) to cut natural gas supplies to power and fertilizer plants so that new users like Essar Oil's Vadinar refinery can be given gas from its KG-D6 fields, reports PTI.

The oil ministry this week issued written instructions to the billionaire Mukesh Ambani-run firm to make a "pro-rata" cut in gas supplies to all existing customers if the production from its KG-D6 field cannot support new customers, two sources with direct knowledge of the information have said.

This follows RIL expressing inability to sign gas supply contracts with more customers owing to production constraints.

Though RIL's Dhirubhai-1 and 3 fields in KG-D6 block can sustain an output of only 60 million cubic metres a day, the ministry has gone ahead and allocated about 64 million metric standard cubic meters per day (mmscmd) of gas.

RIL, so far, has signed or committed to sign agreements for supply of 57.8 mmscmd of gas. The company told the oil ministry at a review meeting last month that it can only ink contracts on a firm basis for another 2.2 mmscmd as it did not want to sign for the product it did not have, sources said.

Sources said the ministry had allocated gas to users, who were not ready to receive the fuel and that was the reason why at least Gas Sales and Purchase Agreements (GSPAs) for 5.18 mmscmd of gas could not be concluded.

Users awaiting signing of GSPAs include state-run NTPC (1.14 mmscmd), Essar Oil's Vadinar refinery in Gujarat (0.6 mmscmd), Oil and Natural Gas Corporation's (ONGC) LPG units (0.406 mmscmd), Rithala power plant in Delhi (0.4 mmscmd) and Bawana power plant (0.93 mmscmd).

Sources said RIL indicated its willingness to sign up with state-owned firms like NTPC and ONGC for the balance of 2.2 mmscmd uncommitted production it had but the ministry wanted others like Essar also to be accommodated.

"GSPAs have to be signed with all the customers, who have been allocated KG-D6 gas and are ready to take the gas," the ministry wrote to RIL on 12th July.

"On the day that KG-D6 production is not sufficient to cater to all the consumers with firm allocation, pro-rata cuts should be imposed on all firm consumers," it added.

An Empowered Group of Ministers (EGoM) had in October last year allocated close to 61 mmscmd of KG-D6 output on firm or permanent basis. Allocations were made only to firms that said they could consume the fuel immediately as the Gas Utilisation Policy does not provide for reservation or holding up of production for anyone.

Sources said the oil ministry allocated close to 64 mmscmd of KG-D6 gas and did not cancel allotments done to companies that failed to take deliveries according to their self- declared timelines.

Sources said customers with pending allocations are those who have not been in a position to take gas for a considerable period of time.

It has been suggested that since there can be no reservation of gas, as stipulated by the EGoM which framed the Gas Utilisation Policy, such allocations should automatically be deemed to have lapsed after a reasonable period. The oil ministry has so far not taken any view on this, they said.

Of the current production, about 14 mmscmd is sold to fertiliser plants, 28 mmscmd to power plants and 10 mmscmd to petrochemical plants and refineries. The remaining seven mmscmd of gas was consumed by other sectors such as sponge iron plants, LPG, city gas distribution and the East-West pipeline.

Essar Oil was allocated 0.6 mmscmd of gas on a firm basis, but the company has not yet signed a Gas Sales and Purchase Agreement (GSPA) with RIL, as its Vadinar refinery in Gujarat was not ready to receive gas from the field till recently.

Sources said RIL has told the oil ministry that it can presently sustain output of only 53-54 mmscmd from Dhirubhai-1 and 3 fields in the KG-D6 block and 7-8 mmscmd from the MA field in the same area.

The company had in December last year tested facilities at KG-D6 for a peak production rate of 80 mmscmd, but it estimates this level of production can only be achieved by next year after more wells are drilled. RIL has 18 producing wells and has sanction of 12 more to produce peak output.

Oil regulator Director General of Hydrocarbons (DGH) has endorsed RIL's view on limitation of production, saying the output was in line with the approved Field Development Plan (FDP).

According to the FDP, peak output of 80 mmscmd was envisaged in 2011 and is to last till 2016.

Most recently, RIL signed GSPAs for supply of 0.86 mmscmd to the Koyali refinery of Indian Oil Corporation (IOC) and 0.2 mmscmd to the Mumbai unit of Hindustan Petroleum Corporation Ltd (HPCL).

RIL is in the process of signing GSPAs with IOC for supply of 0.74 mmscmd to the Mathura refinery and with NTPC for 1.51 mmscmd.

In addition, 1 mmscmd gas is required for operation of the East-West pipeline, which transports KG-D6 gas from Kakinada in Andhra Pradesh to Baruch in Gujarat.


The very serious business of funny money-III

Welcome to the real convoluted world of counterfeit currency in India, where the victim is prosecuted, the fence eats the crop, and the criminals walk free. This is the third part of a three-part series

A few more anecdotes that illustrate how tortuous the system has become as far as counterfeit currency in the country is concerned.

1) A fairly senior news television producer, a person who knows enough people who matter, and whom bank managers defer to. This is what happened to him — last year, around October. I had to give some cash to a friend so I took out money from a bank-attached ATM, from ICICI Bank. He took the money and gave a couple of notes to his father-in-law, who is a real-estate guy. He immediately showed him that the notes were fake. They then took the notes around to some more trusted people dealing in cash on a daily basis and they all confirmed it. (I didn’t see them again). The notes are lost in the market now. (As, we were told, is the norm). I did go to two different ICICI Bank branches to complain but they all seemed clueless to what the procedure is, if any. One bank manager, who showed up promptly on hearing the news, told me to get the notes and said that he will burn them down as that is the normal procedure. But he said that there is no way I could prove that the notes are from the ICICI Bank ATM (or any ATM for that matter) so I might end up in trouble if I go to the cops. End of story.

The list goes on. Hospital cash counters have their own tales, as do people working at liquor shops, and everywhere, the response is the same — destroy or vanish the currency notes somehow — otherwise we will get into trouble. Liquor shop owners are even more droll — they claim they use the forged notes to take care of assorted overhead expenses, and justify it with a knowing look. And there is no dearth of anecdotes and evidence on how large sums of cash/currency seized in the course of raids is often found to contain sizeable numbers of forged or counterfeit currency notes.

What does the central bank have to say on the subject? The master circular mentioned in the previous article, and available here clearly spells out the RBI’s stance on the subject:

There are obviously a few major lacunae in this approach — first of all, the law as it stands in India does not define “ordinary people”. Next, the limit on the number (five) of forged currency notes is arbitrary. Finally, RBI in its wisdom, seeks to wash its hands of the matter by passing the blame completely on to the customer, or constituent, of the bank. Brilliant, pass the bay, and throw the baby out with the bathwater. Certainly makes the statistics look better. Something like the way police stations reduce the number of FIRs by simply not registering them!

However, what we do learn from this is that the matter has been escalated. But that must be cold comfort to those impacted.

So, this, however, still does not answer the basic question: what should you do if you find yourself saddled with counterfeit currency?

Important note number (1): You have for all practical purposes lost the value of the counterfeit currency in your possession. At least until the perpetuator is found. There is, as of now, no apparent way to claim damages. But you are an honest citizen, and want to try to do the correct thing?

There are two main streams:

1) Assuming you have drawn the currency from a bank (ATM or counter), and then you have figured out somehow that the currency is counterfeit, then in the first instance you would be wrongly advised to go back to the same bank. It is a bit like catching a thief and then begging him for justice. The bank’s position is explained above. They quote the law to scare us.

The law as it stands, is Section 39 of the CrPC and Section 489 of the IPC, reproduced here:

Section 39 (1) (xii) of the CrPC says: Public to give information of certain offences. (1) Every person, aware of the Commission of, or of the intention of any other person to commit, any offence punishable under any of the following sections of the Indian Penal Code (45 of 1860) . . . namely (xii) Sections 489A to 489E, both inclusive (that is to say, offences relating to currency notes and bank notes) . . . shall, in the absences of any reasonable excuse, the burden of proving which excuse shall lie upon the person so aware, forthwith give information to the nearest Magistrate or police officer of such Commission or intention.

Here is Section 489A to 489E:

489A. Counterfeiting currency-notes or bank-notes: Whoever counterfeits, or knowingly performs any part of the process of counterfeiting, any currency-note or bank-note, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. Explanation: For the purposes of this section and of sections 489B, 489C, 489D and 489E, the expression "bank-note" means a promissory note or engagement for the payment of money to bearer on demand issued by any person carrying on the business of banking in any part of the world, or issued by or under the authority of any State or Sovereign Power, and intended to be used as equivalent to, or as, a substitute for money.

489B. Using as genuine, forged or counterfeit currency-notes or bank- notes: Whoever sells to, or buys or receives from, any other person, or otherwise traffics in or uses as genuine, any forged or counterfeit currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

489C. Possession of forged or counterfeit currency-notes or bank-notes: Whoever has in his possession any forged or counterfeit currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit and intending to use the same as genuine or that it may be used as genuine, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.

489D. Making or possessing instruments or materials for forging or counterfeiting currency-notes or bank-notes: Whoever makes, or performs, any part of the process of making, or buys or sells or disposes of, or has in his possession, any machinery, instrument or material for the purpose of being used, or knowing or having reason to believe that it is intended to be used, for forging or counterfeiting any currency-note or bank-note, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

489E. Making or using documents resembling currency-notes or bank-notes: (1) Whoever makes, or causes to be made, or uses for any purpose whatsoever, or delivers to any person, any document purporting to be, or in any way resembling, or so nearly resembling as to be calculated to deceive any currency-note or bank-note shall be punished with fine which may extend to one hundred rupees. (2) If any person, whose name appears on a document the making of which is an offence under sub-section (1), refuses, without lawful excuse, to disclose to a police officer on being so required the name and address of the person by whom it was printed or otherwise made, he shall be punished with fine which may extend to two hundred rupees. (3) Where the name of any person appears on any document in respect of which any person is charged with an offence under sub-section (1) or on any other document used or distributed in connection with that document it may, until the contrary is proved, be presumed that person caused the document to be made.

The operative term here is: “knowing or having reason to believe the same to be forged or counterfeit”.  Your correspondent took the effort of getting a lawyer, a CA, a retired policeman and a retired income-tax person to guide him, and this is the best they could come up with — and this is the difficult part — instead of going to a bank, you should head for a police station or a magistrate, with the counterfeit note duly cancelled and marked by you as “forged/counterfeit” so that there is no question of anybody suspecting you of misusing this currency, and lodge an FIR as a private citizen against the bank from whose ATM or teller you got this counterfeit currency. Take a digital photo of this cancelled currency note and place it in your records with a date and time, as well as a brief note on how you got the currency in the first instance, and give the whole lot to your lawyer or to some reliable people before you head for the police station or magistrate. Preferably, take a lawyer with you, but certainly cancel the currency note by writing ‘COUNTERFEIT’ on it in bold letters so that no entity can accuse you of having malafide intentions.

It will now have to be up to the investigative agencies to do what they need to, and you shall have to cooperate, but since you have marked the notes — you are clear.

The second scenario, where you are depositing cash in a bank, and some of it turns out to be counterfeit, is still without a solution, as of now. This will need co-operation and a change in attitude as well as approach from RBI as well as the finance ministry — which, as you can see above, is still awaited.

Moneylife is seized of this subject, which comes up regularly at many different forums and meetings, and shall keep readers in the loop. Till then, prevention is the best part of cure, and if the ATMs in your area are suspect, then use the teller — and get the bank to run the currency notes through their machines before accepting them.



Shantilal Hajeri

7 years ago

This is a burnig issue. I am a retired bank officer after 27 years of service. I have personally faced several problems during my career.
Higher officers in Bank simply advise the officer to destroy the counterfiet notes and make good the loss from his pocket.
RBI is the biggest culprit. Instead of taking concrete institutional steps in co-ordinationwith the Police Department, they simply advise the banks to lodge the police complaint. Police normally harrass the complainant and they do nothing short of treating the comlainant as a culprit as if it is the complainant who has printed the counterfiet notes.

To avoid accountability many instituions including the post offices and railways, ask the customer to write the note numbers in respect of Rs.500/- andRs.1,000/- notes tenderd by him.
This is a totally illegal practice. Even if the note deposited by him his genuine, tomorrow some body has made a counterfiet note of the same number then the person who has recorded this number may be caught.
Writing the note numbers is like a hanging sword on the heads of such people.

RBI guidelines under "Know Your Note" policy are so impracticable that a cashier may need atleast one minute to count one note. The cashiers who handle lacs of pieces in a day can not verify various guidelines given by RBI.

Even the machines available in the market are not foolproof.
The cashiers are never given proper training regarding detection of forged notes.

A day will not be far off when the difference between the counterfies note and the genuine note only simply vanish and our economy will be taken over by antisocial elements with the blessings of the powers that may be.



In Reply to Shantilal Hajeri 7 years ago

Sir Shantilal, hats off to you. You have drawn a true picture of the situation and problem. I also think that capables and the law making pawers should come up and mend this problem instead of talking and passing statemennts over it.

V Malik

In Reply to Shantilal Hajeri 7 years ago

Dear Shantilal ji, thank you for writing in, and can only request you to impress on present and past bank employees to keep bringing this issue up. The persons bringing the issue of counterfeit notes should not be treated as criminals, and only if we make an issue of it will this reach the ears of the powers that be.

Thank you for writing in and please ask your friends to read and share their experiences also.


In Reply to V Malik 7 years ago

Dear Malik, there are many "should" but it seems those are for an ordinery man which is already under all pressures rom all sides. I dont think such a person can perform such duties, he has all fears in his heart which are real. He does fear evehn of a constible. Why such reports are not made by all well peivileged p-ersons, dont they ever recieve such counterfiet mone, are these lessons for ordinery peope only.why govt./RBI take appropriate steps, who is capable of. It seems that one day there will only be such bad money be available in this country if such speed is not checked.

V malik

In Reply to surendra 7 years ago

Surendra ji, I can not agree with you more that for ordinary man on the street things are indeed very draconian lately. The growing middle class is being pushed into a corner. However, somebody has to start, and this article series was one such effort. All I am asking is that people could try to spread the word, and eventually it will reach the top?

k p rao

7 years ago

I am a bank employee. I am being forced to sit in cash counter[receipt]. I stand enlightened by your article.The response by my superiors to my efforts to go to the root of the problem can be described in one word-----EVASIVE.I am looking forward to further articles on this subject


V Malik

In Reply to k p rao 7 years ago

Dear KP Rao, thank you for writing in, and good luck with your efforts. Please read carefully the Master Circular dtd 01jul'10 from RBI on the subject. For the rest kindly issue IOMs to the seniors quoting 39CrPC & 489IPC and also sanitise the cash receipt area as soon as you encounter a counterfeit currency note in receipts - and inform your Union about this.

Good luck.Other bank employees have spoken with me and I understand the difficulty you face.

In case of issues, please also write to us at MoneyLife.


7 years ago

Thanks for this very informative series. At least we now have an idea about what to do when such a currency note comes our way.


V Malik

In Reply to varun 7 years ago

Please read this also:-

""ATMs to be equipped with sensors for detecting counterfeit notes. Till then, banks are to ensure that the ATMs are filled only with notes that have been sorted through Sorting Machines. ""

harish maheshwari

7 years ago

Never forget to take a receipt from the Bank clearly mentioning the Note Serial Nos. while submitting the Fake Notes. This helps in prevention of re-circulation of the seized Fake Notes.



In Reply to harish maheshwari 7 years ago

merely taking a reciept will not leave you in piece, you have lost your money it is granted, as nobody is repaying aginst it, beside if there is any legal proceeding you will certainly you will loose more money,time and at the recieve herrassment for you good job.

harish maheshwari

In Reply to surendra 7 years ago

then what is the course of action according to you. ordinary person loses his money, losses his sleep. then what he should do get his sleep back if getting money is not possible ?.

V Malik

In Reply to harish maheshwari 7 years ago

The purpose of this series was to try and impress on people that the counterfeit currency should be handed over by people to the police, and not back to the bank.

haris maheshwari

In Reply to V Malik 7 years ago

I agree with your base view. You must try your bit to stop this practice.
But the bank issue come when you are transacting with them. They will not allow to take the note back and usually people leave the money at their counter without taking any receipt for the fear of harrassment. I too had done this once. But this time, when I deposited some cash, the counter person said one note is fake. As usual, he kept the note and asked for the fresh one to complete the transaction. When I protested and after several visits to various counters/cabins they issued one receipt mentioning the Note No with a c/c to RBI. This is what I intended to say.

V Malik

In Reply to haris maheshwari 7 years ago

Two scenarios:-

a) You receive a counterfeit note from an ATM or teller. Instead of going back to bank, go straight to police/magistrate and lodge an FIR as per 39/489.

b) You are depositing money and bank detects a counterfeit currency note. Please read the RBI circular as part of this article here:-
and insist the bank proceeds as demanded.

I hope this helps. I know it is difficult, but somebody has to start somewhere.


7 years ago

In all such cases the ordinery person remains a looser, he looses his money, his time, peiece of mind and in return he gets a long chain of dates for attending courts on his own cos. There is no respite to him.


V Malik

In Reply to surendra 7 years ago

Somebody has to take a stand, somewhere, and that's what this is about. And what is there to be scared about, especially if your motives and conscience are clear?


In Reply to V Malik 7 years ago

Mr.Malik, Because one has consciences clear does not mean that he should attract knowingly all the herassment,non of the previleged erson take any such risk. There remains ladies and ordinery persons like old, innocen and daiy wgers also some meek persons, they if dare so will only gain with insults.
People in this country are so selfish and indisciplined that even standing in a que make them annoyed and if you ask them to do so you will be at recieving end, what to talk of such law, rules and regulations. Why do you expect one meek person to abid with KAYADA

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