Blog By – Magizhini M
INTRODUCTION
Counterfeit of money refers to the reproduction of fake currency notes, which is beyond the legal authority of one to produce currency. In India, According to Section 22 of The Reserve Bank of India Act, 1934, the Reserve Bank of India is the only authority under law to produce, print, and issue notes. Counterfeiting of currency leads to the money value getting reduced, loss of trust among the public as to the working of the government, inflation due to increased non-acceptance towards physical money, and the artificial increase in money supply. Counterfeiting has been used as a tool in war in history. This was made in the way of spreading fake notes in the opposition country to reduce the money value of that currency. This has been widely used by different countries to defeat their opposition economically. The economic defeat is the ultimate defeat for a country.
CASES OF COUNTERFEITING OF CURRENCY
There exist many instances of the counterfeiting of currency since the beginning of the 1900s. In 1995, in the aftermath of World War I, Hungary lost a major part of its territory, and in retaliation, three people reproduced 1000- Franc bills, and they were arrested in the Netherlands. This case ultimately led to the formation of the International Convention for the Suppression of Counterfeiting Currency. The countries retarded as world powers, the UK and US were the most subjected to these scams. At the time of World War II, the Nazis teamed up with their allied countries and forged both the currency of the UK and the US, which were so real that the experts found it difficult to distinguish between the original and the forged notes. Most of these notes were bombarded and destroyed and the rest remained unrecoverable. Only at the beginning of the 21st century, these were reduced. India, as always was never an exception to anything, In 2021, Rs. 2000 notes were circulated into the country, mainly through the city of Thane worth more than 8 crores, which was later identified by the NIA to be initiated by Javed Patel, an individual terrorist, to trouble the monetary stability of the country by producing and circulating counterfeited Indian currency. In 2023, five men were arrested as a result of circulating Indian currency worth 20 lakhs rupees of Rs. 500 denomination, the inspiration behind them was a web series developed by an OTT platform. In August 2023, an ex-serviceman who was also an advocate was accused of having been involved in a counterfeiting scam worth Rs. 50 lakhs, with the equipment used for it seized from his home.
Counterfeiters widely used computers, Lens, paper cutting machines, paper counting machines, and printers to indulge in such scams.
THE STAND OF LAW
In 2022, two people from Delhi were imposed with a fine of Rs. 35,000 and five years imprisonment. They held that no person shall be exempted from punishment against a crime conducted based on their gender. It was further held that the fake currency was a threat that shook the economic stability of the country. Section 489A of the Indian Penal Code, 1860 provides the express provision for the punishment to be provided against counterfeit cases. It stated, that when any person counterfeits’ or tries to do so the bank notes, then such as the person is liable for punishment for imprisonment for life, or that extends to a period of 10 years of imprisonment and a fine. Section 489B of the Indian Penal Code provides that a person who uses such notes shall be provided with punishment for life or seven years and with a fine. Section 489C of the Act provides that those who pose such notes are liable to be punished for imprisonment of seven years and a fine. Section 489D of the Act provides that any person who possesses any instruments for the reproduction of the bank notes is liable for the same punishment as under Section 489A of the Act. Many countries provide the punishment of imprisonment and fines for the offense of counterfeiting of currency.
WHAT COULD BE DONE?
The effects of counterfeit currency include the reduction in the money value of the country and thus the reduction in the purchasing power of money. It leads to an increase in the money supply and leads to inflation in the society. This makes the economic stability of the country uncertain and the demand for paper currency reduces suddenly. The approach towards counterfeiting includes, The currencies were induced with holograms creating three-dimensional images, notes of different colors, stripes embedded in them, and watermarks were made in the currencies. The purpose of these steps was to prevent the manipulation of the notes, by creating complexity to the process by inducing non-reproducible structures to them. Machines were introduced to check the originality of the currency. Polymer banknotes made up of synthetic substances such as plastic were introduced to stop reproduction. Counterfeiting is addressed effectively but is only on the rise, in the era of digital currency, the circulation of those can be encouraged over physical currency. The punishment towards it is not implemented strictly, there should be the imposition of stringent punishment on those who commit or try to commit such counterfeit ling offenses.
CONCLUSION
Counterfeiting of currency is a global threat as every country ranging from the developed to the developing countries, shakes their stability in the economy and leads them to poverty, economic instability, inflation, and reduction of purchasing power of the country. The counterfeiters had aimed to destroy the economy of the country. This act needs to be curbed to protect the country from the deadliness of instability affecting its overall economic and social development.