RBI Updates Note Sorting Machine Parameters for New Banknotes

RBI/2022-23/79 DCM(NPD)No.S488/18.00.14/2022-23 July 1, 2022 The Chairman/ Managing Director/ Chief Executive Officers All Banks Dear Sir/Madam Note Sorting Machines - Authentication and Fitness Sorting Parameters Please refer to our circular DCM(R&D)No.G-26/18.00.14/2009-10 dated May 11, 2010 setting out ''Note Authentication and Fitness Sorting Parameters'' for the Note Sorting Machines installed in the banks. 2. In the backdrop of introduction of the new series banknotes, these parameters have been reviewed and a revised set of guidelines are enclosed for implementation. 3. The guidelines shall be implemented with immediate effect. Yours faithfully (Sanjeev Prakash) Chief General Manager Encl : As above. Guidelines on Note Authentication and Fitness Sorting Parameters 1. Introduction A fit note is a note that is genuine, sufficiently clean to allow its denomination to be readily ascertained and thus suitable for recycling. An unfit note is a note that is not suitable for recycling because of its physical condition or belongs to a series that has been phased out by Reserve Bank of India. All the fitness parameters laid down in this document are to be evaluated individually. A note must pass all the fitness parameters to be considered fit for recycling. These parameters provide the minimum standards for cash handling machines used by banks (hereinafter called ‘the machines’). Notes can only be recycled / reissued if they are evaluated as genuine and fit according to these parameters. Authenticity check is a prerequisite for fitness sorting. Fitness sorting can be done only in case of genuine notes. The machines shall be able to identify and segregrate suspected counterfeits and notes which are unfit for circulation in terms of these standards in a reliable and consistent manner. The Reserve Bank of India phases out certain series of notes from circulation from time to time. These notes, though considered legal tender unless otherwise specified, are unfit for reissue. As and when the Reserve Bank of India decides to phase out a specific series of a specific denomination of notes, the machines shall sort all the phased out notes as unfit, irrespective of their physical condition. 2. Applicability These parameters are applicable to machines operated by banks, either directly by their staff or indirectly by their agents. These machines can be of any of the following: machines which check the authenticity and fitness of notes, i.e. note processing machines / note sorting machines, and machines which check only the authenticity of notes, i.e. note authentication machines and classify the individual notes as either genuine or suspect. 3. Authenticity Check The machines shall perform authenticity check with reference to the features of genuine notes as disclosed by the Reserve Bank of India from time to time on its website. Any note which is not found to be having all the features of a genuine note shall be classified by the machine as suspect/reject. 4. Fitness Sorting As a part of fitness sorting, notes with any visual or physical defects are to be sorted as unfit as per the criteria set out in Table 1 . Table 1: Sorting Criteria

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-23/79 · issued 01 Jul 2022. The plain-English explanation above is BankPulse’s own independent summary.

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