What changed
RBI finalized the guidelines on 'Note Authentication and Fitness Sorting Parameters' after stakeholder feedback, replacing the draft version from December 2009. The guidelines now include detailed fitness sorting criteria (e.g., soiling, limpness, tears) and mandate that machines classify notes as genuine or suspect. Banks must implement these standards with immediate effect.
What it means for you
Banks must upgrade or configure their note sorting and authentication machines to comply with RBI's fitness parameters, ensuring only genuine and fit notes are recycled. Non-compliant machines could lead to circulation of unfit or counterfeit notes, increasing operational risk. This standardizes cash handling across all scheduled commercial banks, RRBs, and cooperative banks.
What you must do
- Ensure all note sorting and authentication machines meet RBI's finalized fitness parameters immediately.
- Configure machines to classify notes as genuine or suspect, and sort unfit notes per Table 1 criteria (soiling, tears, stains, etc.).
- Update internal cash handling SOPs to align with the new guidelines and train staff on compliance.
- Verify that machines can identify and separate phased-out series notes as unfit, regardless of physical condition.
Who it affects
All scheduled commercial banks (including RRBs), Scheduled State Co-operative Banks, Scheduled (Primary) Urban Co-op Banks, Cash handling machine manufacturers and vendors, Bank staff and agents operating note processing machines
What is the key change in these finalized guidelines compared to the draft?
The finalized guidelines incorporate stakeholder feedback and provide specific fitness sorting criteria (Table 1) for defects like soiling, tears, and stains. They also mandate that machines classify notes as genuine or suspect, with fitness sorting only for genuine notes.
Are phased-out series notes still legal tender?
Yes, unless RBI specifies otherwise, phased-out series notes remain legal tender but are considered unfit for recycling. Machines must sort them as unfit regardless of physical condition.
Do these parameters apply to all types of cash handling machines?
Yes, they apply to both note processing/sorting machines (checking authenticity and fitness) and note authentication machines (checking only authenticity), operated directly by bank staff or indirectly by agents.