Public needs to be alert when they receive currency notes from their senders, banks and corporations as the risk of counterfeit and fake currency notes has become a serious issue due to negligence from banking companies.
Commercial and microfinance banks, across the country, have failed to implement the required process at their designated branches for the purpose of verification of authentic notes that reduces the risk of fake and counterfeit currency notes within their operations and the banking system.
Banks Missed Deadlines
State Bank of Pakistan (SBP) had earlier given a deadline of January 02, 2018 to commercial and microfinance banks to complete the process of verification and authentication of currency notes but the banking institutions failed to meet the deadline, as per the central bank.
Banks were given a new deadline of June 02, 2018 to ensure circulation of tested currency notes within their operations as per Currency Management Strategy.
There is always a risk of counterfeit and fake currency notes in the system, however, this could be mitigated primarily by the concerned authority through systems and public knowledge and awareness about authentic banknotes.
Commercial banks successfully implemented the first phase of the strategy in which these institutions installed machines at various branches in 30 cities and districts and circulated tested and authenticated banknotes of Rs 500 and above (including 1,000 and 5,000 notes) denominations.
The central bank also carried out a couple of public awareness campaigns on media under the “Rupay ko Pehchano” campaign. SBP also launched an app for a similar purpose.
What is Currency Management Strategy?
Banks are deploying machines at various branches as per the “Currency Management Strategy” set by the central bank in consultation with Pakistan Banks Association.
The central bank suggested 11 machines for checking out currency notes which are mainly of Chinese, Japanese, Korean and German origin.
Commercial and microfinance banks were advised to finalize up to a maximum of three types (models) of machines that meet the central bank’s prescribed sorting/authentication standards of the currency notes of different denominations.
As a result, cash management is being automated in the banking industry to ensure availability of machine-authenticated good quality banknotes to the general public.
For effective implementation of this strategy, commercial banks need to streamline their prevailing currency management processes and automate the same in-line with international best practices.