Mumbai: A high-level committee appointed by the Reserve Bank of India (RBI) to counter the menace of fake currencies in India on Tuesday recommended that the central bank should encourage use of cards and electronic means of payment.
In its report, the committee headed by RBI deputy governor Usha Thorat said the number of counterfeit notes detected at bank branches and RBI offices increased from 102,687 in 2000-01 to 398,111 in 2008-09. The number of counterfeits detected per million pieces in the banking system has ranged from three to eight. It also recommended that RBI take steps to “encourage the installation of note detectors at places where large volume cash transactions are conducted”.
The committee was formed on 26 August after a large cache of fake notes, around 75,000 pieces worth Rs4.02 crore, was recovered at the Domariaganj branch of a nationalized bank in Uttar Pradesh. Experts in currency management welcomed this recommendation to promote the use of plastic money.
According to Piyush Khaitan, managing director of Venture Infotek Global Pvt. Ltd, an e-payment infrastructure provider, it is time India reduced its dependence on cash and switched to alternative payment systems as cards and electronic payments. “This is an absolutely welcome step in the right direction,” said Khaitan.
He says cash as a percentage of money supply in India is about 18-20% against 5-6% in developed countries and 8-10% in developing countries such as Thailand, Malaysia and the Philippines.