Former Information Technology Minister Kapil Sibal created a furore in parliament on Tuesday by holding up currency notes with discrepancies in their size and print quality. He demanded an explanation, while his colleague in the Rajya Sabha, Gulam Nabi Azad, described it as “the biggest scam of the century”.
Mr Sibal said, "There are so many discrepancies in the notes which are in circulation. We are not making any allegations as yet but the government and the RBI must answer questions. Despite the differences in design and size, all the security features are there in the notes indicating they have been printed within the knowledge of the RBI and the finance ministry”.
"These notes are not counterfeit. I took the differing notes to banks and they were found genuine. Why and how is this allowed? Where were these notes printed? Why are the sizes and design different?" the former Union minister asked at a press conference later.
"It is presumed that the die for printing can only be of one size. Therefore, where were the dies of different sizes prepared for the purpose of printing currency notes, whether within the country or outside the country? Nowhere in the world are currency notes of the same denomination in different sizes and design," Sibal said.
Is it really a national scandal? Are discrepancies in the notes such a national scandal? While the government will answer Mr Sibal and others, Moneylife decided to check with experts in the currency printing business to figure out what is going on.
Our experts says that the discrepancies are not a major scandal, but appear to be minor differences that crop up based on where the note is printed – whether at the ultra modern Reserve Bank of india (RBI) press in Mysuru (Karnataka) or the old government security printing presses at Nashik (Maharashtra) or Dewas (Madhya Pradesh).
In fact, world over the acceptable tolerance in cutting of printed currency notes is between 0.5 millimetre (mm) to 1 mm. Cutting tolerance is the small variations that occur when printed items are cut down to the appropriate size.
All cutting machines in the world have cross direction and machine direction tolerance, basically in terms of length and breadth. Tolerance is one feature that you cannot do away with and other currencies like the Dollar and Euro also have a tolerance. Even laser cutting has microns tolerance.
The printing facility at Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL) has two cutting machines, one KBA Giori from Switzerland and other UNO from Japan. The KBA machine has a tolerance of 0.5 mm in each direction while UNO has 0.25 mm.
The same KBA machines are used at the Security Printing & Minting Corporation of India Ltd (SPMCIL), the Indian government-owned unit that prints bank notes and mints coins.
Sometimes, these currency presses use the manual guillotine method for cutting the notes. The least count of these machines cannot be less than 1 mm in each direction. In addition, there is a chance of notes being cut cross.
Importantly, all of the cutting does not touch design or security features of any note but happens on the white border only. Hence, two notes,which touch the either end of tolerance, may show difference in size.
The Government presses at Nashik and Dewas do manual guillotine cutting of notes owing to stretching and sometimes the note sizes may differ beyond the tolerance of within 1 mm achieved in automatic cutting. The Reserve Bank’s BRBNMPL does only automatic cutting. Hence discrepancies in size can occur.
Having said that, it must be admitted that some of the confusion stems from sloppiness in quality control. A few days ago, a whatsapp message showed that the security thread in a Rs500 note was on the central panel in one note and very close to the image of Mahatma Gandhi in another. On asking, experts confirmed that the notes were genuine but the difference ought to have been noticed and the defective note thrown out as a quality control measure during online inspection of security paper, which comes with the security thread already embedded.
So the next time you see slight differences in currency, including the magenta pink which tends to rub off, don’t panic. The note may not be a fake or forged one.
Also, with so many counterfeit notes and coins, this difference assumes even more importance...we should be able to identify a genuine note from counterfeits...