Countries the world over are plagued with counterfeiting and duplicate currency notes that not only cause a tremendous drain on the exchequer but also fund nefarious terrorist, anti-social, anti-national activities and promote subversion, sedition, secession and crime.

India is no exception to the scourge of counterfeit currency. Counterfeit currency finds its way into the country from neighboring states of Pakistan and even found in Nepal. The Reserve Bank of India (RBI) has clarified in August 2009 that there is no official estimate of forged notes in circulation, made by any government agency.

Organized criminal gangs as well as solo operators promote and circulate fake notes. Fake notes are found in the 1000, 600 and even 100 and lower denominations.

In the past, it was very difficult to manually or even with the help of machines to replicate original dies and templates and fake notes were poor copies that could be easily detected by an alert individual. It was also difficult to print and push large quantities of fake currency.

It was only when counterfeiters got hold of old printing blocks/dies and blanks that it was possible.

With the advent of digital technology it has become very easy to scan and fake currency notes, print them on high quality paper using similar ink. In fact the fakes currently in circulation are so close to the real ones that they even incorporate most security features including the watermark.

Given the proliferating instances, volume and quality of the fakes that make detection difficult, it is necessary to adopt digital features to improve security of the currency notes.

Surprisingly, the Indian Government is still planning to tread the path of having plastic notes to fight fakes and counterfeiting like other countries in the past.

Digital security features and options do exist that can be very cost effective and provide good safety.

Digital watermarking – Currency notes can have digital watermarking making creation of fakes extremely difficult.

RFID – On the lines of the security thread embedded in the note, an RFID chip can be inserted with a specific code number for identification and to ensure non-duplication.

Secure printing features like gaps in words / numbers – holograms could also be incorporated making it difficult to duplicate currency notes.

Finally, a currency note gets its distinct identity from the serial numbers on it. The concept of e-cash has been well developed and ultimately could provide a trouble free secure method of representing money. In fact, even in the bank where money is usually deposited and invested, the money is represented in and recorded in an electronic form unlike the paper records of the past. Thus adoption of e-cash per-se, just like the dematerializing of shares, may well be accepted by the people. The e-cash would be spent and valid for one transaction like the passcode / code number for internet time or talk time recharge.

The e-cash currency would then be digitally secure and hence safer than the physical currency and practically difficult to duplicate.

The interest group on security attempts to create awareness and ignite ideas for a secure tomorrow that are affordable, efficient and effective.

Adopting digital security features for currency notes is the way forward and early adoption by countries would make the world economy secure, safe and better protected.

If you have useful ideas or wish to contribute your thoughts and views, kindly send an email to Dr. Vishnu Kanhere, Hon. Secretary, CSI-Mumbai Chapter, Convener of the interest group on information security.

E-mail: vkanhere@gmail.com