Banks shouldn't send seized counterfeit currency notes to police: Home ministry to RBI

NEW DELHI: The Union home ministry has asked the Reserve Bank of India (RBI) to impress upon banks to not send seized counterfeit currency notes to the police but handle it themselves if the number of counterfeit notes seized are up to four pieces in a single transaction. This comes after the RBI asked for rules to be “reconciled” regarding seizure of counterfeit notes at banks.

Present rules say for cases of detection of counterfeit notes up to 4 pieces in a single transaction, banks need to send a report to the police along with the seized notes while if the number of fake notes seized is more than four, banks must mandatorily register an FIR as well.

However, the home ministry has been deluged with complaints from state police forces on what they are supposed to do with fake notes sent to them (in the four or less cases) since no FIRs are required and police cannot destroy them.

“These notes, numbering into lakhs over the years, are just piling up at police stations across India,” a home ministry official said. Nearly 4.5 lakh number of counterfeit notes were seized in various banks last year but FIRs were registered only in 686 cases since maximum seizures were in the category of four or less notes in a single transaction.

“We have suggested to RBI to handle the fake notes seized in this category themselves and not send them to police,” the official added. A meeting was held between home ministry and RBI officials on the issue on Tuesday.

“There was a suggestion that FIRs be allowed even in cases of seizure of four or less fake notes but that may cause considerable harassment to unsuspecting people who may be using a fake currency note by mistake and may hence end up facing an FIR. That has not been agreed to by home ministry,” a government official said.

Another issue discussed was that as per present RBI rules, detection of counterfeit notes at banks is only at the back office or currency chest and not when tendered over the counters where notes are only checked for arithmetical accuracy.