BoN pulls out N$200 000 worth of counterfeit money

March 8, 2015, 9:10pm

BoN pulls out N$200 000 worth of counterfeit money

Bank of Namibia (BoN) has intercepted about N$200 000 worth of counterfeit money from circulation to date reducing penetration of illicit notes in the economy to two notes per million in the last four years The Villager can reveal.

BON’S Director of Strategic Communications and Financial Sector Development, Ndangi Katoma confirmed to The Villager that the central bank pulled out about N$229 050.00 worth of counterfeit notes out of circulation between 2010 and 2014.

Katoma said circulation of counterfeit money is still way below the Bank’s threshold of 10 pieces per N$1 million.

The current ratio of counterfeits reported is also well below the international benchmark of 70 pieces per million banknotes in circulation.

“We have received a number of counterfeit money incidence reported to Bank of Namibia via all commercial banks and through the Namibian Police,” said Katoma.

In the last financial year (FY2014), a total 343 counterfeit pieces were recorded which translated to a total of seven counterfeit pieces per million banknotes in circulation as stated above.

Katoma added that the largest counterfeit amount ever recovered was N$83 800.00 by the Namibian Police in Katima Mulilo in December of 2011 while still in the hands of the counterfeiters. 

“The Police apprehended the counterfeiters before they could introduce the counterfeits into circulation,” said Katoma.

Katoma added that counterfeiting of currency is an old phenomenon experienced world-wide and some of the factors that contribute to it is criminality.

“As stated above counterfeiting is an old phenomenon experienced world-wide. However the BoN has embarked on numerous measures to curb the trend by doing the following: Public awareness campaigns through the media on the security features of genuine currency; Counterfeit detecting workshops with cash handlers, law enforcement agencies as well as commercial banks; Periodically enhancing the security features of the Namibia dollar,” added Katoma.

Katoma further noted counterfeit notes will lead to the devaluation of the currency and fuelling of inflation.

“Owing to this, the purchasing power of people increases and there is a rise in the demand for goods and services. Then, since supply cannot meet the demand, shortage of goods occurs, which in turn, leads to the general rise in prices (inflation),” he noted.

Counterfeiting of notes also leads to the non-reimbursement by banks as banks become aware of the fake currency being involved in some significant business transactions and  is confiscated with immediate effect. However, most of the time, the businesses do not get reimbursed for their money.

Katoma also added that there will be a loss of public confidence in the national currency as people tend to lose faith in the economy of their country and the money that they hold when counterfeit money is prevalent.

“In order to avoid any kind of encounter with counterfeit money, people may start making demands for their payments to be made in some other more stable currencies,” said Katoma.

According to Katoma, the Namibia dollar has been printed using modern sophisticated state-of-the-art printing technology among the very best in the world as such; it does not require special tools to detect counterfeit money.

“Counterfeits are detected using only natural human senses such as sight, feel and by tilting the bank note to check for special security features for authenticity. In additions, the banknotes contain security features that are machine readable,” said Katoma.

Bank Windhoek’s Communication Practitioner, Toivo Mvula said Bank Windhoek has from time to time received fraudulent/counterfeit notes deposited by clients but there has not been an increase in cases.

Mvula noted that counterfeit money is forged or altered to make it look authentic thus the main reason for counterfeiting money is to illegally gain or obtain products/services people cannot afford.

“Counterfeiting money is a criminal offence and Namibia has a Prevention and Counterfeiting of Currency Act (Act 16 of 1965), which clearly outlines how to prevent the counterfeiting of money in Namibia and how to deal with people involved in the counterfeiting process,” said Mvula.

Mvula added that the due to counterfeit notes circulating, the international community might lose confidence in the country’s currency as its reputation is affected by the quantity of fake currency floating around. 

“Locally counterfeit money affects the companies from which criminals receive goods and services using fake currency. These companies lose revenue as they are not compensated for receiving the money unknowingly,” added Mvula.

Mvula also noted BON has in the past run various awareness campaigns to educate the Namibian public on how they can identify real notes and coins from the fake ones.

“Bank Windhoek staff members in branches are also trained to identify real currency from fake currency as well as educate the clients in this regard,” he noted.

Meanwhile central Bank Deputy Governor Ebson Uanguta also confirmed that the bank has put in place measures to detect counterfeiting.

“This Counterfeit bank notes are taken out of circulation when detected by the police. The police would go there and take the counterfeit notes from the people who were caught with them. This is to prevent these notes from circulating in the market thus this means these notes are not circulating in the market at all,” he said.

Charmaine Ngatjiheue: The Villager