Banking Awareness 6th Oct Update: bar-coded currency notes to eliminate Fake Currency
They can eliminate black money, fake notes and curtail shadow economy, says research group
Does it make economic sense to switch to bar-coded currency?
One multi-disciplinary research group certainly thinks so. The group’s study has made out a case for bar coding of currency to address a host of issues, ranging from fake notes to black money and financial crimes.
Though this is not the first research group to have mooted the idea, the group’s suggestion coincides with the Reserve Bank of India’s pilot launch of plastic (polymer) ₹10 notes which have higher durability in select cities some time ago.
In the paper titled, ‘Barcode Currency Notes in Future – Necessity and its Benefits’, published in a recent issue of the Journal of Computer Science and System Biology, R. Chidambaram (Sri Lakshmi Narayana Institute of Medical Sciences, affiliated to Bharath University, Puducherry), et al argue that imprinting notes with barcode will be a booster shot for the economy in more ways than one.
The economy of India is the seventh largest in the world measured by the nominal Gross Domestic Product (GDP) and it stands third due to its purchasing power parity.
Obstacles to growth
The black money, unaccounted money, and fake money are obstacles to fastest-growing economies of a country especially the developing countries like India, the researchers said.
Because of the advances in printing technologies, one can easily print fake notes, bringing down the value of real money.
As the government steers the economy from the taxes paid by citizens, a situation where black money eats up a part of this tax, increases the government deficit. In a vicious cycle, attempts to balance this deficit often result in more taxes and borrowings, which in turn leads to a further increase in the government debt.
“The infusion of unaccounted black money in the economy leads to higher inflation and also increases the disparity between the rich and the poor. If the black money is brought out, it will create employment, uniform wealth across the nation and increase the size of country’s economy. Alternatively, use of electronic money in the form of debit cards/credit cards/online banking is better as it saves the cost of printing the currency notes,” the paper notes.
However, though debit/credit cards are accepted in most of the malls and star hotels, the main drawback is the lack of awareness in rural areas. Information on their use should be spread in rural areas where the basic infrastructure is not good and literacy rate is 71% which is below the world average of 84%. Given this situation, the researchers propose currency notes imprinting with barcode.
The barcode advantage
As all the notes are having unique barcode, not more than one note can have the same identity. If the barcode of two notes matches, fake note can be easily identified and taken out of circulation.
By using the barcoded notes, crimes and thefts can easily be identified, solved, and reduced in future. If the stolen barcoded notes circulate in the marketthey can be easily identified.
As each banking transaction of the barcode currency notes is scanned and details are updated in the core-server for each scanning, the barcode currency notes in circulation on a daily can be easily registered.
The bank details, account number and the place of last transaction of the currency note can be easily traced .
The currency notes which have not been used during certain time can be declared as black currency or hidden currency notes.