Bank note counterfeit: DA writes to Reserve Bank governor

Earlier this year, when the South African Reserve Bank withdrew from circulation and replaced our R200 banknotes, they declared that this was not in reaction to counterfeit notes in circulation, but rather to upgrade the security features.

I was subsequently informed by the Bank that a fraud syndicate had replicated a key security feature of the R200 note and that this had rendered useless the over-the-counter security checks at the commercial banks. This obvious risk to our financial system was effectively contained and resolved. Allegations circulating at that time that the South African Bank Note Company misprinted the notes appeared unfounded.

The report today in the Sunday Independent that our R100 notes now appear to have been compromised by mismanagement at the South African Bank Note Company is reason for concern.

There is no doubt that syndicates operate relentlessly to replicate several currencies, including our own, and that reserve banks must remain ahead of this risk by ensuring that security features are meticulously upheld and constantly evolved. Crucially, our banking system must be able to effectively identify counterfeit notes via its over-the-counter security checks, which now appear to have been brought into question.

The Reserve Bank Governor, Gill Marcus, needs to explain any failure at the South African Bank Note Company and assure the public that our R100 note has not been compromised.

If it has, immediate action must be taken to ensure ongoing confidence in our currency. This is a risk to which our economy should not be exposed and cannot tolerate. The Democratic Alliance will write to the Governor to establish what action is being taken over this matter.

Statement issued by Dion George, MP, Democratic Alliance shadow minister of finance, December 5 2010

Click here to sign up to receive our free daily headline email newsletter