What changed
RBI issued a comprehensive Master Direction replacing all previous circulars on counterfeit notes, consolidating instructions under one reference. Key updates include mandatory machine-based authentication for all over-the-counter and bulk tenders, and explicit penalty for failure to impound.
What it means for you
Banks must now ensure every note tendered is machine-checked; no manual bypass allowed. Credit cannot be given for counterfeit notes, and they must be stamped and impounded. This tightens operational discipline and shifts liability to banks for any lapse, with penalties for non-compliance.
What you must do
- Implement mandatory machine-based authentication for all over-the-counter and bulk note tenders.
- Stamp all detected counterfeit notes as 'COUNTERFEIT NOTE' and impound them in a separate register.
- Issue acknowledgement receipts (Annex II) to tenderers and display public notices.
- Report all counterfeit detections to local police and RBI Issue Offices as per prescribed formats.
- Designate a nodal officer and establish a Forged Notes Vigilance Cell at head office.
Who it affects
All scheduled commercial banks, Currency chest operators, Bank branch staff handling cash, Nodal officers for counterfeit detection, Forged Notes Vigilance Cells
What happens if a bank fails to impound a counterfeit note?
Failure to impound is treated as wilful involvement in circulating counterfeit notes, and RBI will impose penalties on the bank.
Can a customer get credit for a counterfeit note detected at the counter?
No. No credit can be given to the customer's account for any note found counterfeit, whether at the counter or back office.
What reporting is required to RBI under this Master Direction?
Banks must submit monthly reports to RBI Issue Offices on counterfeit notes detected, and half-yearly reports on Forged Notes Vigilance Cell activities.