Mumbai: Reserve Bank of India Friday directed banks to ensure that their branches in the districts with international borders are equipped with note authentication/sorting machines, as it found that efforts of some of the lenders were not adequate for the detection of counterfeit currency.
The central bank, through a master direction issued in April, prescribed comprehensive instructions to the banks on detection, reporting, and monitoring of counterfeit notes.
The banks are mandated to train all their employees handling cash about the security features of genuine banknotes to enable them for detecting counterfeit notes.
Further, all banknotes received by the bank shall be examined for authenticity through machines, counterfeit notes should be impounded in all cases, and in no case the counterfeit note shall be returned to the tenderer or destroyed at the bank.
All detected Fake Indian Currency Notes (FICNs) has also to be reported, as per prescribed guidelines.
“However, an analysis by the Reserve Bank suggests that efforts of some of the banks in the matter were not adequate,” the central bank said in a circular, which asked the banks to review their processes so as to further strengthen their capacity and preparedness to identify, impound and report FICNs effectively.
The banks have also been advised to undertake certain specific measures.
In addition to the existing instructions, “the banks shall ensure that the branches in the districts with international borders are equipped with note authentication/sorting machines”, the circular said.
As per the instructions issued in April, all bank branches/ identified back offices should be equipped with ultra-violet lamps/ note sorting/ authentication machines to facilitate the detection of counterfeit notes.
The RBI has also asked banks to adopt a focused and target-based approach for conducting awareness and/ or 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.
The lenders have also been asked that their Forged Note Vigilance (FNV) cells should analyse the FICN data of their bank to identify hotspots (if any), monitor trends and focus their outreach and capacity-building efforts accordingly.
