note demonetisation

No, the RBI hasn't announced a Rs 2,000 note with a 'nano GPS chip' that it can track

RBI's official release about the notes doesn't mention a tracking chip.

Prime Minister Narendra Modi may have surprised India after he announced on Tuesday that Rs 500 and Rs 1,000 notes would no longer be legal tender, but one part of the new system didn’t come completely out of the blue. For a few days now, pictures of new Rs 2,000 notes have been floating around the internet and Modi announced that these will be issued for limited circulation soon. But those pictures also came with some rather fantastical rumours about these notes.

According to these rumours which were circulating on WhatsApp even before the demonetisation announcement, the new notes would come with what is variously described as a “micro nano GPS chip”, which is supposed to be able to help track individual notes by way of satellite.

The technology even has its own serious-sounding abbreviation, NGC, and the rumours – some of which made their way to the mainstream media, like this Zee News post – “the chip has been fitted in such a way that it can detect Rs 2000 notes even from 120 meters below the ground.”

That would be astounding, if it were true. Except it isn’t. On Wednesday, the RBI dismissed the rumours entirely saying that such technology does not exist anywhere in the world.

According to the rumours, the technology would have meant that piles of cash would be detectable from space, making life much easier for police forces (and anti-corruption crusaders). And it’s not impossible, even if it may sound so. American engineers have developed ways to embed radio frequency identification chips on paper in ways that could aid tracking.

Finance Secretary Ashok Lavasa said that the new notes that will be introduced will be “high security”, suggesting, as is routine, that new currency paper comes with added security features that make them harder to counterfeit. But he did not mention any tracking features.

When the Reserve Bank of India officially announced all the details about the new Rs 2,000 notes, however, there was no mention of any NGC.

There are a few interesting elements to the new note. Besides the colour, it will include a picture of Mangalyaan, the Indian spacecraft that made it all the way to Mars. Details about the currency does not include any mention of new security or tracking features, which presumably the RBI would want to advertise if they had implemented such technology.

Rumours might always insist that the government may not be telling us about the new technology – all the better to detect illicit cash piles once the notes are in circulation – but it seems unlikely that such information would be kept hidden, or that people would not discover the chips soon after they are out in the economy.

And even though the technology appears to be possible, barring fantastical notions of satellites being able to track piles of cash deep into the ground, it also might not yet be affordable enough to actually put on currency, even high-denomination notes.

Update: The post has been updated to include a fresh quote from the finance secretary saying the new notes will be “high security.”

Update 2: On Wednesday afternoon, RBI spokesperson Alpana Killawala told News18, “such a technology does not exist at the moment in the world, then how can we introduce such a feature?”

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