Master Direction on Counterfeit Notes – Detection, Reporting and Monitoring
UR
- Applies toAll regulated entities
- StatusIn force
- RBI text changedRBI updated this document on September 01, 2026. BankPulse is re-reading it. BankPulse checked all 49 points on this page against RBI's new text on 2 October 2026. Every quoted line is still in RBI's text.
- IssuedApr 01, 2026
- Amendmentsnone tracked
- Length49 points in 2 sections · 5 min read
The four dates on this rule
- PublishedApr 01, 2026The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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What it says
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Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. Written to every bank
RBI addresses this whole rulebook to the head of every bank.
2. Only banks or RBI impound
Only banks and RBI's own Issue Offices may impound a fake note.
3. Counter notes are machine-checked
Notes handed in at the counter must be checked by machine.
4. No credit for a fake
A customer's account is never credited for a note found fake.
5. Never handed back to anyone
A fake note is never returned to the person who brought it in.
6. Not impounding it is serious
A branch that fails to impound a fake note can itself be penalised.
7. The note gets stamped, logged
Every fake note is stamped "COUNTERFEIT NOTE" and logged in a register.
8. Each note recorded under signature
Each impounded note is recorded under signature in its own register.
9. Customer still gets a receipt
The customer gets a signed receipt even if the note was fake.
10. A notice is put up
A notice about this rule must be shown at every branch.
11. Receipt given even if refused
A receipt is issued even if the customer refuses to sign it.
12. Up to four, monthly report
Up to four fake notes in one go into the monthly police report.
13. Five or more, report now
Five or more fake notes at once go to the police right away.
14. A copy goes to HQ
A copy of every police report also goes to the bank's own Head Office cell.
15. Police receipt must be kept
The bank must get and keep the police's own acknowledgement of receipt.
16. Insured post needs proof too
If sent by insured post, proof of police receipt is still required.
17. CCTV covers the banking hall
The banking hall and counters must be covered by CCTV.
18. Patterns are watched, flagged
Any pattern of repeated fake notes is watched and flagged at once.
19. Foreign fakes go to CBI
A suspected fake foreign note is referred to the CBI's Interpol Wing.
20. Every bank names one officer
Every bank must name its own district-wise contact officer for this work.
21. One officer handles reporting
All police reporting under this rule goes through that one named officer.
22. Big notes machine-checked first
Notes of 100 rupees and above are machine-checked before being paid out again.
23. Applies to every branch alike
This rule applies to every branch, whatever its daily cash volume.
24. A fake note from ATMs
A fake note coming out of an ATM counts as the bank circulating it.
25. White Label ATMs covered too
The ATM rules also cover White Label ATM Operators, not just banks.
26. Chest remittances treated as seriously
A fake note in a currency-chest shipment is treated just as seriously.
27. UV lamps, sorting machines needed
Every branch and back office must have UV lamps or note-sorting machines.
28. Currency chests need fuller machines
Currency chest branches need full verification, processing and sorting machines.
29. Daily record of notes checked
A daily record is kept of every note run through the sorting machine.
30. Counters get counting machines too
Customers can also check their own notes on a counter machine.
31. One cell at Head Office
Every bank must run a dedicated Forged Note Vigilance cell at Head Office.
32. Half-yearly report to RBI
That cell reports to RBI every March and September.
33. Report due in a fortnight
That half-yearly report is due within two weeks of the half-year ending.
34. Cell details updated every April
The cell's own contact details are sent to RBI every 15th of April.
35. Monthly count to RBI, 7th
A monthly count of fake notes found goes to RBI by the 7th.
36. Say so even when zero
A month with no fake notes found is still reported, as nil.
37. Also reported to FIU-IND
Fake-note cash transactions are also reported to India's anti-money-laundering unit.
38. A slip-up can mean penalty
Missing or mishandling a fake note can itself bring a monetary penalty.
39. Police-returned notes kept safely
Fake notes handed back by police are kept safely, with a record.
40. Checked every March, September
These notes are checked twice a year, every March and September.
41. Kept three years after receipt
These notes are kept three years after the police hand them back.
42. Court cases keep notes longer
If a case goes to court, the notes are kept three years after it ends.
43. Then sent on to RBI
Once the keeping period ends, the notes go on to RBI's own office.
44. Cash staff must know features
Every staff member who handles cash must know a note's real security features.
45. Regular training for cash staff
Regular training on spotting fake notes runs for all cash-handling staff.
Background
1. Old circulars are now gone
This one rulebook now replaces every older circular on the same subject.
2. A tougher law applies too
The very highest quality fakes fall under a separate anti-terror law.
3. Every note design on file
RBI has put every banknote design's own security features on record for training.
4. Covers notes, 10 to 2000
The security-feature details cover every note from 10 rupees up to 2000.