Sri Lanka steps up surveillance on counterfeit notes

Sri Lanka’s Central Bank is ramping up efforts to stamp out forged notes, after a steep rise in counterfeiting activities in the past few months, officials said Tuesday. Sri Lanka’s Central Bank is ramping up efforts to stamp out forged notes, after a steep rise in counterfeiting activities in the past few months, officials said Tuesday. Confirmed counterfeit cases went up to 2,009 last year, over 690 in 2003. There were some 450 million notes in circulation in 2004, alone, the bank’s superintendent of currency, A Jeewandara told our sister programme The Money Report.

Counterfeits

 

2003 2004
Confirmed 690 2009
In circulation 393 million 450 million
Per million 1.75 4.46
(Source: Central Bank)

Since the Central Bank is the sole authority to issue currency in Sri Lanka, it also has the thankless task to maintain the integrity and public confidence.

Most of Sri Lanka’s currency is printed at the Thomas de la Rue in Biyagama, in which even the Central Bank has a stake.

The bank’s currency printer is constantly upgrading its technology to stay ahead of counterfeiters using features like watermark, security thread, intaglio printing, the see-through-feature and multi layer latent image.

But most of the recently detected counterfeit currency notes have been printed using inkjet printers and computers, Jeewandara said.

“Counterfeiting currency notes is an offence, and passing counterfeit notes to a third party is also an offence, which carries a fine and a jail term. A person should never try to pass on a forged note,” he warns.

Central Bank tries to keep clean notes in circulation as a policy, by destroying old and mutilated notes that come into the banking system.

Smaller notes have a shorter life span than others.

With Sri Lanka being a tropical country, as well as bad practices in note usage, is making the Central Bank’s job of keeping notes clean more difficult.

Mutilating notes is also an offence.

Counterfeits as a % of notes issued

Canada 0.011
UK 0.0078
USA 0.0075
Euro area 0.0078
Germany 0.00079
Sri Lanka 0.00097
(Source: Central Bank)

Central Bank says more dirty notes are found in some outstation areas, because banks do not return them to them to be destroyed.

Officials say commercial bank branches should send old notes to their head offices to be exchanged from Central Bank.

Each year, the bank destroys notes worth more than Rs. 20 billion and replaces them with new ones.

This year, the bank brought in new notes to the value of Rs. 37 billion to replace old ones and cater to rising currency needs of the public.

Each year, the bank spends about a billion rupees to print, store, re-issue and destroy notes and coins.

On the international scene, the Canadian currency is a favourite target for counterfeits, followed by the United States and UK.


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-The Money Report Newsdesk: asantha@vanguardlk.com