Maswood Alam Khan
Mr. Abdul Jalil, chairman of Mercantile Bank, is a veteran politician who is also a member of parliament and Prof Abul Barakat, Chairman of Janata Bank, is an economist of repute. Their backgrounds suggest they should wholeheartedly wish for the present government to succeed. They would be the last persons to state something — true or false — that may embarrass the government or any of its machineries. But, comments they made recently on a sensitive issue of our economy not only embarrassed the government but also cast a chill of fear to the people.
While speaking at a roundtable conference, Mr. Jalil and Mr. Barakat, as reported in the news media, have both voiced their deep concern about wide circulation of fake currency notes in the country and warned that the economy would suffer greatly if the government fails to wipe out the fake notes from the market. Bangladesh Bank, the central bank, of course, vehemently refuted the report on widespread circulation of fake notes and expressed their indignation at such comments made by such highly placed persons.
When Bangladeshis are grappling hard to find solutions to multifarious problems like adulteration of foods and medicines, rampant obtainability of fake driving licenses and counterfeit academic certificates, share certificates abnormally losing their values for unholy syndications, and fecundity of party politics dividing the country, a report or even a debate on fake currency notes augurs very badly.
To prove wrong what Mr. Barakat and Mr. Jalil said on fake notes, representatives of Bangladesh Bank, the sole money regulator, checked the vaults of four banks to identify the fake notes. After examining around 9.07 lakh pieces of TK 100 and TK 500 notes they did not find any fake note. Great! But, such checking in the bank vaults to sniff out fake notes was ludicrous, wasn’t it? Isn’t it like checking the Security Printing Press, the mint where Bangladeshi currency notes are printed, to find out whether the mint itself did print any fake notes? Are the bankers and the bank cashiers, for that matter, so inept that they would heap their vaults with fake notes?
A fake note is rejected by a cashier of any bank right over the counter in the first place and the possibility of finding fake notes in the vaults of any scheduled bank or of the central bank is zero — unless there is an unholy link between the banks and those involved in the monkey business of printing money. To detect fake notes central bank representatives instead of checking the bank vaults had to go rather to rural areas where shoppers and sellers are too ignorant to distinguish a genuine note from a forged one.
People like experienced cashiers of a bank who often handle money can easily identify a lower-quality fake note instantly just by touching it. They can detect counterfeits simply by feeling the texture of a note and paying attention to its features. The paper on which is printed currency notes, is not sold commercially. Furthermore, the composition of the paper and ink is extremely confidential. Genuine currency notes are printed in the intaglio printing process with clear and crispy prints that are slightly raised, making it convenient for one to feel their embossed textures.
Hard as it may be, modern scanning, colour photocopying and offset printing mechanisms in the state of the art printers and presses — and the obviously vast incentive to counterfeit bills — have opened back doors for criminals at home and abroad to mass-produce forged notes. They know it is easy to hoodwink a naïve person like you and me into believing a fake note as a genuine one. Paradoxically, some ingeniously produced fake notes apparently feel, smell and look the same as the real ones and in some cases they are more attractive than the genuine currency notes, making it difficult even for an experienced cashier to detect the forgery before testing them by a counterfeit detecting device.
Our poor and gullible people in our villages don’t have tools, knowledge or time to examine every single note with a magnifying glass to check its authentic coloured filaments, watermarks, security thread, saw-toothed profiles, alignments, fine details and all those microprints.
As a banker myself with more than 32 years of experience before my retirement, I had observed that counterfeit notes were available more in the vicinity of areas bordering India and Burma than inside a city or a town. I also found, to my surprise, some currency notes in mutilated forms and shapes as though they were many years old and were yet fake, meaning the counterfeiting operations must have been going on unnoticed for ages. Unscrupulous money printers find it safe to sell the fake notes as part of their cross-border trade, distancing themselves from the danger of being arrested by the law enforcement agency of the country whose currencies they forge.
Prof Abul Barakat, chairman of Janata Bank, said: “Fake notes worth TK 5,000 crore, mostly in denomination of TK 500, are coming into the market every day and one-third or one-fourth of those notes are fake.” If such a figure of fake notes entering the market on daily basis is even near-correct, it is distressingly alarming and forebodes an inconceivable financial calamity that may erode public trust in our currency and in our money management.
We don’t know exactly on what basis Mr. Barakat, an eminent economist, derived the data! He must have made an extensive survey and analysed the existing monetary situation in our country from different perspectives before arriving at his opinion on the issue. One basis of his inference could be the unusual inflation that may be an unwelcome result of excessive money — or genuine — flooding the market which perhaps is not commensurable with the amount of Taka 68,000 crore, the recorded supply of authenticated currency notes in the money market.
Stable money growth, as we know, leads to stable economic growth. Printing too much money causes inflation and too less deflation. Printing money and its effect on inflation is a bit more complicated than it sounds. Only the central bank knows how much money is actually in circulation and it is the monetary policy decision of the government that determines how much new money should be injected into the economy to check and control price and inflation.
Mahmud Ali from New Eskaton Road, Dhaka, wrote in a letter published recently in The Financial Express that among a number of violet-coloured one thousand taka currency notes he got from a bank he discovered some notes where the words “Bangladesh Bank” were absent on the side where the portrait of Bangabandhu is printed while other notes contained those words. Mr. Mahmud urged the authority to ensure quality control in currency printing. But what in his letter especially attracted my attention was a sound of fear he tried to express by quoting Adolf Hitler of Germany who had adopted the policy of circulating fake British pound notes just before the end of the Second World War to cripple the British economy.
We believe and hope that there is no Adolf Hitler anywhere in and around us who is out there to cripple our economy. But we should nevertheless be cautious and vigilant.
Counterfeiting — and also debasing currency notes and coins — is an old monkey business. Even today, one per cent of US paper currency in circulation is counterfeit. Even the kings used to debase their currency to cheat their subjects. History is unfortunately replete with examples of governments trying to print money in order to finance their expenditures. Nobel Prize-winning economist Friedrich von Hayek put it this way: “History is largely a history of inflation, and usually of inflations engineered by governments and for the gain of governments.” The hyperinflations of Germany in the 1920s and of Bolivia, Argentina, and Brazil in the 1980s — and maybe the latest great recession since 2008 — are all examples of governments debasing their currencies and engaging in what Ludwig Heinrich Edler von Mises, the great Austrian economist, called “a fraudulent attempt to cheat the public.”
It is laudable that the Bangladesh Bank has already undertaken a series of measures in facing the problem of fake notes and making the people aware about the spread of such fake notes. As a part of tackling the problem, Bangladesh Bank has brought all of its note-counting halls and counters under the watch of CCTV camera round the clock. The central bank, according to their recent circular, will also take stringent administrative and legal measures against those who would be found involved in any sort of irregularity in this regard. Besides, the banking sector regulator has also been running advertisements in the media and hanging posters at railway stations, bus terminals, bank branches, hat-bazaars and other public places where the features and characteristics of originals currency notes of different denominations are clearly displayed for public awareness.
Yes, there should be aggressive media campaigns with a slogan ‘Know your currency notes and beware of monkey business of money printing!’
– The writer is reachable via email@example.com