Termites ate currency notes worth Rs 3.75 crore

At a time when Indian banks are facing acute liquidity shortage and a consequent impact on the flow of credit to productive sectors of the economy, a startling revelation has come to light about currency notes worth Rs 3.75 crore being eaten away by termites in the vaults of State Bank of India.

The country’s largest public-sector lender lost the money to white ants at its regional office in the Brabanki district of Uttar Pradesh.

Although the incident dates back to 2010, the information came to light only on Wednesday, when Minister of State for Finance Namo Narain Meena stated it in a written reply to a Lok Sabha question.

The Reserve Bank of India (RBI) has since asked all banks to undertake anti-termite measures.

The RBI in May this year had also directed banks to follow a clean-note policy and issue only clean currency notes to public.

It had also asked the banks to do away with the process of stapling currency notes, and instead securing note packets with paper bands.

The central bank has also asked lenders to withdraw soiled currency notes from circulation.

The banks have also been asked to stop writing anything on the watermark window of notes, as it disfigures the watermark impression and recognition becomes difficult.

As per RBI data, on an average, one out of five paper notes in circulation, or over 20 per cent, gets disposed of every year after getting soiled, and the number of such soiled currency bills stood at over 1,300 crore units during the fiscal ended March 31, 2012.

The RBI is also planning a trial for plastic or polymer currency notes with a view to increasing their shelf-life. 

Besides, the RBI has issued guidelines to be followed by lenders in order to prevent damage to bank notes.

As per its new rules, the walls of the currency chest should be built as per specifications approved by the Indian Banks’ Association.

Currency chests should not be located in areas that could be affected by floods, and the vaults in the basement must be constructed with care as these will be prone to
seepage.

Fitness certificates are to be obtained by the RBI on a regular basis from chest-maintaining banks.