For years, residents and businesses in Pakistan have been concerned about the rise of counterfeit money being circulated within the country. In an attempt to clean up the currency system, State Bank of Pakistan has announced that they will fine commercial banks that accept or dispense forged notes through ATMs.
SBP is pushing financial institutions in Pakistan to modernize currency machines and procedures that will better detect fake money. SBP will give a RS 10,000 fine, in addition to the value of the counterfeit notes accepted or dispensed, to any bank violating new regulations, reports Business Recorder.
Circulation of forged currency has been an on-going epidemic in Pakistan. Many money exchangers and businesses have been forced to shut down because of the increased production and high quality of fake banknotes.
It has been difficult to differentiate authentic notes from bad ones, as police have reported 90 percent of the fake currency notes match the same features of the original, according to an article published in IndiaToday that said most fake Indian currency is also produced in Pakistan. Pakistan is listed as the one of the largest sources of fake currency production, which is being distributed throughout South East Asia and parts of the Middle East region.
SBP has been working hard to clean the corrupted currency system and implemented a law back in 2004 that required banks to begin omitting physically damaged or cut currency notes from being used.
The Tribune Express reports that SBP has been conducting consumer surveys to help deter counterfeit circulation, asking for residents’ opinion about changing paper quality, size, design or security features on bank notes. The survey will also ask consumers to report if and how they received fake money in the past to help SBP create an effective strategy to reduce circulation.
In addition to ATM fines, SBP has warned there will be different scales of penalty beyond the first RS 10,000 fine if the bank continues to repeat the same offense.
“Banks shall avoid repetition of any irregularity pointed out in the previous report and repetition of any irregularity will attract additional penalty besides fine on routine violation. This additional fine will be RS 10,000 per instance,” an STB representative told Business Record.
Banks will also face a RS 2,000 fine if they fail to accept legal coins, namely RE 1, RS 2 and RS 5 or if they do not provide customers and the general public with a banknotes-coins exchange service.
The SBP ensured they will remain vigilant in enforcing the new bank regulations, and in their efforts to change currency management. They announced that they will be making surprise visits to banking retail branches periodically to check their quality of banknotes and services.