LONDON, Nov. 23, 2016 /PRNewswire/ -- India's decision to withdraw its high denomination banknotes had been widely interpreted as being aimed at tax evaders and corrupt officials. In a new analysis, however, the risk management consultancy Allan & Associates notes that the switch's main purpose is to eliminate high-quality counterfeit banknotes, almost certainly made by state supported actors in Pakistan.
"The counterfeits entering India are of very high quality," said James Brazier, Managing Editor of the company's A2 Global risk information service. "Unless you know what you are looking for, they are hard to distinguish from the genuine article."
A2 notes that a state printworks is necessary for the creation of such close counterfeits, and that the evidence points overwhelmingly towards Pakistan, India's longstanding adversary. The INR1,000 counterfeits are printed on cotton currency paper, with watermarks and windowed security threads. They are printed with intaglio and optically variable inks that are only feasibly available to a state actor.
The counterfeits have been disseminated into India by organised criminals and militant groups, likely with approval from senior figures within the Pakistani state. India's decision to replace its top denominations will drain such groups of funds, while countering Pakistani attempts to undermine the stability of the Indian monetary system.
However, Brazier added a note of caution. "Counterfeits don't need to be exact replicas," he pointed out. "They just need to be good enough to be accepted by most retailers. As a result, it is likely that the new notes will also be counterfeited, though it might take a few years."
For further information on this story contact Mitch Heron via [email protected] or +44 0207 523 5393.
Allan & Associates is a security risk management consultancy which provides a wide range of protective services from initial political and security risk assessments to crisis management response to individuals, businesses, government agencies and NGOs operating in volatile environments throughout the world.