What changed
Previously, only branches with average daily cash receipts of ₹50 lakh or more had to use note sorting machines for ₹100+ notes. Now, every branch—regardless of cash volume—must machine-check all ₹100 and higher denomination notes before re-issuing them over counters or through ATMs.
What it means for you
Banks must invest in or deploy note sorting/authenticity machines at every branch, not just high-cash branches. This raises operational costs and requires logistical planning, especially for rural and small urban branches. Non-compliance is a serious regulatory breach.
What you must do
- Procure or redeploy note sorting machines to all branches, including low-cash branches.
- Train branch staff on machine operation and counterfeit detection protocols.
- Update cash management SOPs to ensure no ₹100+ note is re-circulated without machine processing.
- Conduct internal audits to verify compliance and report any gaps to the compliance head.
- Acknowledge receipt of this directive to RBI if not already done.
Who it affects
All scheduled commercial banks (including RRBs), Scheduled state co-operative banks, Scheduled (primary) urban co-operative banks, Branch operations and cash management teams, Compliance and audit departments
Does this apply to ATMs as well?
Yes, the directive explicitly states that banknotes in denominations of ₹100 and above may be re-issued through ATMs only after machine verification for authenticity.
What happens if a branch does not comply?
Non-compliance is treated as a violation of the RBI directive, which could lead to regulatory action, including penalties or other supervisory measures.