BI to withdraw vulnerable notes

BI to withdraw vulnerable notes

Rendi A. Witular, The Jakarta Post, Jakarta

In a bid to reduce the rising number of counterfeited banknotes,
the central bank is planning to withdraw more notes considered
vulnerable to counterfeiting.

Bank Indonesia governor Burhanuddin Abdullah said the
banknotes subject to immediate withdrawal were the Rp 50,000 and
Rp 10,000 notes. New Rp 100,000 and Rp 20,000 banknotes were
released last month.

"The withdrawal is aimed at protecting the banknotes from
counterfeiting," said Burhanuddin at a press briefing on
Wednesday, after meeting Vice President Jusuf Kalla to report on
the central bank's attempts to combat counterfeiting.

Burhanuddin said the new banknotes would have improved
protections to prevent them from being easily faked, with one new
feature being the so-called "rainbow watermark" lines.

Unlike the old notes, which only have one protection line
using one color, the new banknotes will have a number of lines
using different colors.

"The protection system applied for our new banknotes will be
similar to those applied for the upcoming euro notes," said
Burhanuddin.

The government is currently trying hard to combat the number
of counterfeit banknotes, on discovering the extent of
counterfeiting practices over the past few years.

Data from Bank Indonesia shows that from January to September
2004, BI collected 36,550 fake notes, a 40 percent rise on the
same period last year.

Left unchecked, counterfeit banknotes increase the amount
money in circulation, adding to inflationary pressure that erodes
people's purchasing power.

BI banknote circulation director Lucky Fathul said while the
number of counterfeited banknotes in Indonesia was still lower
than in most countries worldwide, the central bank will remain
vigilant.

According to Lucky, on average there were only seven
counterfeited banknotes for every million notes in Indonesia at
present. This is lower than the 110 per million in the United
States, and 56 per million in Europe.

In order to help reduce counterfeiting, the central bank has
appealed to police, prosecutors and judges to impose severe
punishments on people involved in the practices, Lucky added.

"At present, counterfeiters have usually been penalized with a
lenient two-year prison sentence, while the maximum punishment is
15 years."