Indian printing company suspends officials over defective currency notes

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by Annika Backe

March 17, 2016 – It is a printing company’s nightmare: overlook just one tiny little detail and you have to pulp the whole edition. As for the Indian banknotes printing company Security Paper Mill (SPM), headquartered in Hoshangabad, the dimensions are far greater. It had produced millions of defective currency notes. According to insiders, 30,000 notes with a face value of 1000 rupees as well as 80,000 specimens of the 500 rupee note are already circulating. 

SPM took appropriate action and suspended two members of the executive board. However, the incident caused disturbance among politicians and panic among the citizens in the light of the fact that the notes are worthless and have to be withdrawn now. They lack the security thread which is intended to render the counterfeiters’ work difficult. In fact, they have forged banknotes to such an extent that the Indians have developed an official term for these notes: FICN, or Fake Indian Currency Note. 

Although there are no fakes involved in the latest incident, the lack of care is nevertheless surprising – not just on the part of the printing company. One wonders why the state appoints an enterprise that has caused a stir already in 2012. Its banknotes possessed all the necessary security features back then, yet those were not Indian but Arabic, which led people to worry about national security. 

Only two years later, the Indian government was faced with the next costly situation. When, after a personnel change, it took a couple of months to realize that the notes produced in the meantime actually still bore the signature of the Reserve Bank’s former head, a total of 146 million notes had to be shredded. The financial damage amounted to an equivalent of 5.1 million euros. Although the incident took place early in 2014, the general public was informed as late as the end of 2015. 

After the production of currency notes was temporarily outsourced to Italy, Prime Minister Narenda Modi planned to regain people’s trust in their currency, which is now being produced in India again. The latest trouble, however, is anything but helpful. 

The news was published in the Times of India of January 8, 2016.

Please find the website of Security Paper Mill here.

Here you can learn more about the Fake Indian Currency Notes …

… and how to detect them.