Concerned over the expansive net of fake currency, a special committee constituted by the Reserve Bank of India, in August 2008, has recommended some measures to check the menace that may prove very dangerous to the economy. It urged RBI to direct all banks to install note sorting machines (NSMs) in a phased manner.

Bank branches with average daily cash receipts of Rs. 1 crore or above have been asked to install NSMs by March 2010; while others have been asked to install these machines by March 2011. The committee headed by Usha Thorat, Deputy Governor of RBI, observed: “The banks should provide a road map to the RBI for equipping the remaining branches with NSMs, which will be monitored by the RBI.”

The committee also suggested the promotion of electronic means and plastic cards, in a bid to overcome the fake currency problem. To address the problem, banks are urged to use quality notes in their ATMs, using the ‘cassette swap system’ for feeding notes.

The committee also emphasized on making the public aware about the security features of notes and constantly upgrading various security features.