100 Million ₹1000 Banknotes Without Security Thread Put into Circulation

[Bimat]

RBI tells banks to replace defective 1,000-rupee notes

Updated: January 1, 2016 23:05 IST

Out of 300 million defective banknotes that were printed in one of the printing presses of government-owned Security Printing and Minting Corporation of India, about 100 million of those notes have hit the market leaving the general public in a tizzy.

About 200 million pieces were transferred to the RBI's currency chests, some of which was then loaded in banks' automated teller machines, sources close to the development said.

Currency experts said that the checking of notes is done at the press-level and the banking regulator is not involved with checking each and every banknote.

An RBI spokesperson has confirmed the development and said banks have been asked to replace such notes with the central bank, when found. Banks have also been advised to replace such notes whenever a customer approaches them. The notes are genuine though they are defective, the spokesperson said.

There are four printing presses which print and supply banknotes. These are at Dewas in Madhya Pradesh, Nasik in Maharashtra, Mysore in Karnataka, and Salboni in West Bengal.

The presses in Devas and Nasik are owned by the Security Printing and Minting Corporation of India (SPMCIL), a wholly owned company of the Government of India. The printing of the notes in Karnataka and West Bengal are done by the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of RBI.

Sources said the defected notes were printed in the Nashik press while Security Paper Mill of Hoshangabad produced the currency note paper. The security thread was missing in the defective pieces, the sources said. The 1000-rupee notes which was introduced in October 2000, contain a readable, windowed security thread alternately visible on the obverse with the inscriptions 'Bharat' (in Hindi), '1000' and 'RBI', but totally embedded on the reverse.

As on March 31, 2015, there were 5,612 million Rs 1000 denominated notes in circulation which constitutes 6.7 per cent of the total notes in circulation. In terms of value, Rs 1000 denominated notes constituted 39.3 per cent of the total value of notes in circulation.

Notes of denominations of Rs 500 and Rs 1,000 together accounted for approximately 85 per cent of the total value of banknotes in circulation at end- March 2015. Notes of Rs 10 and Rs 100 together accounted for 54 per cent of the volume at end- March 2015, RBI data shows.

Source: The Hindu

[dheer]

Wow that many pieces with out the security thread is glaring error.

[Bimat]

I do not think it's 'just another mistake'! 100 million faulty ₹1000 banknotes!!! Was QC department sleeping? This is compromise with national security! What a shame! Any fraudster can now print similar banknotes in any number and put them in circulation...

Aditya

[dheer]

The safety feature only do so much. It's the quality control that key.

[Bimat]

I understand that CBI (Central Bureau of Investigation) and IB (Intelligence Bureau) have started investigation regarding the faulty ₹1000 banknotes as it may be a part of larger conspiracy than what's being thought...

Aditya

[dheer]

I understand that CBI (Central Bureau of Investigation) and IB (Intelligence Bureau) have started investigation regarding the faulty ₹1000 banknotes as it may be a part of larger conspiracy than what's being thought...

Aditya

Maybe, to me its more like lax QC ... there is no need for a conspiracy    ... why spend the time and efforts of creating a conspiracy when things can happen on its own without any effort 

One would have to take into large number of people to pull this off ... the fact that such a basic stuff got missed from 300 million pieces when every note is checked is glaring QC and that to at multiple levels ...

[Bimat]

Some new developments:

It's now alleged that some employees at the Nashik Press 'burnt' 30 crore (300 million) faulty ₹1000 banknotes after they realized the error. Workers' Union at the press is now protesting against the management after disciplinary action is being planned.

Also, it also appears that there is another lot of ₹1000 banknotes with different error: The Gandhi watermark has been printed upside down. This is not confirmed though.

Aditya

[dheer]

Some new developments:

It's now alleged that some employees at the Nashik Press 'burnt' 30 crore (300 million) faulty ₹1000 banknotes after they realized the error. Workers' Union at the press is now protesting against the management after disciplinary action is being planned.

Also, it also appears that there is another lot of ₹1000 banknotes with different error: The Gandhi watermark has been printed upside down. This is not confirmed though.

Aditya

Strange indeed. How can employees by themselves burn/destroy the notes. There would be a proper process with relevant approvals. 

Gandhi watermark upside down ... interesting ... looks more like the paper was feed incorrectly for printing ...

[Bimat]

More updates: 

These faulty ₹1000 banknotes are from 3AP and 5AG series. Keep your eyes open for them.

Finance Ministry and RBI have anyway decided to burn these notes according to a report. However it's still unclear whether the employees at the Nashik press burnt them without any approval from concerned authority or they had some instructions from senior management.

Aditya

[Bimat]

According to RBI, not more than 500 faulty ₹1000 banknotes are in circulation. (Source) I do not know how did they come to know about that number, but I think it's idiotic statement, considering that there are 100 million faulty banknotes printed!

Aditya

[dheer]

Looks like a massive cover up happening

[Bimat]

Looks like a massive cover up happening

More cover-up, this time from the printing press in Nashik. They have clarified that employees did not burn faulty banknotes but the faulty paper which was supposed to be used for printing them! At-least it's not clear that something was burnt.

Aditya