Millions of notes not printed in mints land in RBI vaults

MUMBAI: Hundreds of crores of rupees that have apparently never been printed have mysteriously made it to the vaults of the Reserve Bank of India over the years. Records show that millions of ghost notes - notes that have not been produced at our nation's mints - are somehow reaching the RBI.

A series of RTI applications reveal that while the mismatch between currency bills printed and transported to the RBI is seen across denominations, it is more pronounced in the case of higher value notes - those of Rs 1,000 and Rs 500.

Take the Rs 1,000 notes. The redesigned bill was introduced in October 2000. Ever since, the two authorized mints — Bharatiya Reserve Bank Note Mudran Private Limited, Bangalore, and Currency Note Press, Nashik — have printed a total of 4,452.3 million Rs 1,000 bills. But RBI records show that it has received 4,462 million notes, an excess of 9.7 million notes. That means the RBI has received Rs 970 crore more than what was actually printed.

"These are not accounts of some fledgling start-up we are referring to. How can the country's apex bank be indifferent towards this? The facts are startling and I feel that more than one note with the same unique number is being printed," said RTI activist Manoranjan Roy, who sourced the information through the RBI.

Roy had applied to the RBI for all relevant data; the bank forwarded his application to the presses for the total count of notes printed. He has now asked President Pranab Mukherjee to intervene and order an inquiry.

The apex bank, however, claims there is nothing improper or illicit in this mismatch. Its spokesperson said: "One reason for the difference between the number of notes supplied by printing presses and the numbers provided (to you) by printing presses could be that the printing of notes is a continuous process over years. It is not necessary that all notes printed in any particular year are supplied to RBI in that year itself."

The RBI's contention that printing and transporting notes is a non-stop process and that some of the money may be in transit is at odds with its own rules, which specify that mints cannot keep any stock. In fact, they don't even have any vaults to hold the money.

Also, the number of notes printed by the presses and received by the RBI do not tally even after accounting for the earlier stock. In any case, while the RBI's argument may make sense if we look at figures for individual years, it cannot explain how the number of notes delivered over the years can exceed the total number of notes ever printed.

Between 2000 and 2003, the mints delivered all the 1,000-rupee notes they printed to the RBI. In the next year, only 209 million of the 213 million notes printed were delivered, and in 2004-05, 257 million notes were delivered while 0.3 million notes were shown as being in transit.

The puzzle then is: How did the RBI receive a total of 598 million notes when only 591.342m were printed, and 0.3 million were in transit. In value terms, the discrepancy amounts to Rs 668.8 crore. Figures show a similar trend in 2010-11. If notes in transit are taken into account, 3.342 million more notes reached the RBI than were actually produced.

The RBI's response to this: "It may be a big number, but in terms of currency notes, when you are printing hundreds of millions of notes, a difference of a few million will not matter," its spokesperson said.

India prints its notes at three government mints in Bangalore, Nashik and Dewas. In case of Rs 500 bills, too, data shows that the RBI gets many more notes than the total count of bills minted. Between 1999-00 and 2010-11, the RBI received 339.95 million more notes than were actually printed.

It is surprising the nation's apex bank has not spotted this anomaly in its own books. Shouldn't the mystery of the ghost notes be investigated?