What changed
RBI has consolidated and updated its Scheme of Penalties for bank branches and currency chests into a single Master Direction, issued on April 1, 2025. The scheme specifies penalties for shortages in soiled note remittances, counterfeit notes, mutilated notes, and non-compliance with operational guidelines like CCTV and note sorting machine usage.
What it means for you
Banks face stricter financial penalties for lapses in currency management and customer service, including per-piece fines for shortages and counterfeit notes. Operational failures like non-functional CCTVs or note sorting machines will also attract penalties, increasing compliance costs and operational pressure on branches and currency chests.
What you must do
- Ensure all bank branches and currency chests comply with Clean Note Policy and operational guidelines.
- Implement robust processes to detect and impound counterfeit notes using machines for all over-the-counter and bulk tenders.
- Maintain CCTV systems and note sorting machines as per RBI standards, with proper recording preservation.
- Train staff on penalty provisions to avoid shortages, mutilated notes, and operational non-compliance.
- Review and update internal audit procedures to align with the new Master Direction.
Who it affects
All scheduled commercial banks, Bank branches handling currency exchange, Currency chest operators, Bank compliance and audit teams
How are counterfeit notes handled under this scheme?
Banks must examine all notes through machines; failure to impound counterfeit notes detected at their end is construed as wilful involvement in circulating counterfeit notes. Penalty shall be levied in terms of the instructions issued by DCM (FNVD) No.G-4/16.01.05/2025-26 dated April 1, 2025.