Demonetisation will hit terror funding & counterfeiting

These notes have at least 7-8 additional security features which are very tough to replicate

The demonetisation of Rs 1,000 and Rs 500 notes is expected to hit terror funding and counterfeiting as there are additional security features in new notes which are very difficult to replicate, a senior government official said.

Counterfeiting of new Rs 2,000 and Rs 500 notes would be very difficult as they have at least 7-8 additional security features which are very tough to replicate.

It would take years for anyone to counterfeit the new notes being circulated, the official said, adding funding of terror activities would be badly affected due to demonetisation.

The official said the change of higher denomination of Indian currencies was long overdue as in normal circumstances any country changes its notes in every 7-8 years with additional security features to check its counterfeiting.

There was no major change in the Rs 1,000 notes ever since it was introduced in the year 2000 while changes in the Rs 500 notes, which was launched in 1987, were done more than a decade ago.

Change in the security features of Rs 1,000 and Rs 500 notes was long overdue and the present demonetisation move, even though abrupt, was absolutely necessary, the official said.

There is an estimate that around Rs 17,00,000 crore black money was in circulation in the country and even though many people attempt to whitewash the black money they have, it is certain that around Rs 4,00,000 crore is not coming back to the banking system.

This will clean up the economy and windfall gain for the government, the official said.

Prime Minister Narendra Modi on November 8 had announced that Rs 500 and Rs 1,000 notes ceased to be legal tender and asked people possessing such notes to deposit or exchange the same with banks.

He had said new Rs 2,000 and Rs 500 notes would be introduced with different colour and design.

Finance Minister Arun Jaitley said on Saturday that it will take up to three weeks for all two lakh ATMs in the country to be re-calibrated.

READ OUR FULL COVERAGE ON THE MODI GOVT'S DEMONETISATION MOVE