RBI directs banks in border districts to install note authentication, sorting machines
New Delhi, July 31
The Reserve Bank of India on Friday directed banks to equip branches in districts bordering other countries with note authentication and sorting machines.
The direction came after the central bank noticed that some lenders' efforts to detect counterfeit currency were inadequate.
In a circular, the RBI said banks must ensure all banknotes received are examined for authenticity using machines and that counterfeit notes be impounded in all cases.
It directed banks to train every employee handling cash about the security features of genuine banknotes to enable them to detect counterfeit notes.
Counterfeit notes must not be returned to the tenderer or destroyed at the bank, the RBI said, adding that detected Fake Indian Currency Notes (FICNs) must be reported as per prescribed guidelines.
As per the instructions issued in April, all bank branches or identified back offices should have ultra-violet lamps or note sorting or authentication machines to facilitate the detection of counterfeit notes.
The RBI has also directed banks to adopt a focused and target-based approach for conducting awareness and refresher programmes for cash handling staff on the security features of genuine banknotes and detection of FICNs.
"It shall be ensured that all the cash handling staff of the bank are imparted training positively by October 31, 2026," the circular said.
RBI had also asked lenders to use their Forged Note Vigilance (FNV) cells to analyse the FICN data of their bank to identify hotspots, monitor trends and focus their outreach and capacity-building efforts accordingly.
"When a banknote tendered at the counter of a bank branch or back office is found to be counterfeit, an acknowledgement receipt in the prescribed format must be issued to the tenderer, after stamping the note," the April circular said.
The receipt, in running serial number, shall be authenticated by the cashier and tenderer, it said adding that a notice to this effect shall be displayed prominently at the offices or branches.
— IANS
Reader Comments
This is a much-needed move. I work at a bank and we've been requesting for better counterfeit detection equipment for ages. The training deadline of October 2026 seems far away though - shouldn't this be faster given the seriousness? Better late than never, I suppose. Hope the FNV cells actually function properly this time.
The RBI should have done this ages ago. Every time I hear about counterfeit notes, I remember how our currency is being used to fund illegal activities across the border. The machines cost money, but they're worth it if they protect our economy from fake currency and terror funding. Jai Hind!
Good initiative but I'm a bit skeptical. We've seen many circulars before, but ground reality is different. Last week alone, a fruit vendor in Amritsar got stuck with a 500 rupee counterfeit note and the bank staff couldn't even identify it properly. Let's hope this time banks take it seriously and don't just file the circular away. 🤔
The process of impounding notes and giving acknowledgements is important. But I wonder if this will discourage honest citizens from depositing suspicious notes? If someone accidentally gets a fake note and goes to the bank, they might face unnecessary hassle. The RBI needs to ensure the process is citizen-friendly and not seen as a punishment for the common man.
Good step by RBI, but we need to ensure border district banks get priority. There's a lot of smuggling happening through Bangladesh and Pakistan routes. I've heard that fake notes with extremely high quality are coming in
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