What changed
RBI has mandated that from May 1, 2025, all new NSM deployments must comply with the BIS standard IS 18663:2024, published on March 19, 2024, after due consultation with RBI and other stakeholders. This circular references the earlier July 2022 circular on authentication and fitness sorting parameters.
What it means for you
Banks must ensure only BIS-certified models are deployed after the deadline. This will standardize note sorting quality, reduce counterfeit acceptance, and improve fitness detection across the banking system. Non-compliance could lead to operational or regulatory risks.
What you must do
- Audit your current NSM inventory to identify models that do not meet IS 18663:2024 standards.
- Plan procurement or upgrade of BIS-certified NSMs before May 1, 2025, to ensure compliance.
- Coordinate with vendors to obtain BIS certification for existing or new NSM models.
- Update internal policies and training for cash management teams on the new standards.
Who it affects
All scheduled commercial banks, Cash management and treasury departments, NSM vendors and service providers, Banknote processing and sorting operations
What is the key deadline for NSM compliance?
From May 1, 2025, banks must deploy only NSM models that conform to BIS standard IS 18663:2024 and are duly certified by BIS.
Does this circular apply to existing NSMs already in use?
The circular does not address existing machines; it only states that from May 1, 2025, banks should deploy only compliant models. Banks should assess their current inventory for compliance.
Where can I find the full BIS standard?
The standard IS 18663:2024 is available at the link provided in the circular: https://www.services.bis.gov.in/tmp/LITD42522283_07032024_1.pdf