Mumbai: The Reserve Bank of India (RBI) has directed banks to install note authentication and sorting machines at branches located in districts bordering neighbouring countries. The move aims to strengthen the detection of counterfeit currency and improve cash handling standards across the banking system.
The central bank issued the fresh instructions after observing that some banks were not adequately identifying fake currency notes.
Stricter Checks
The RBI said all banknotes received at branches must be checked for authenticity using note authentication or sorting machines.
If a counterfeit note is detected, it must be impounded immediately. Banks have been clearly instructed not to return fake notes to customers or destroy them. Instead, all Fake Indian Currency Notes (FICNs) must be reported according to the prescribed guidelines.
The central bank said these measures are essential to prevent counterfeit currency from re-entering circulation.
Staff Training Mandatory
The RBI has also asked banks to ensure that every employee handling cash is trained to identify the security features of genuine banknotes.
Banks must adopt a focused and target-based approach for awareness and refresher programmes for cash-handling staff.
The central bank has set October 31, 2026, as the deadline for completing the training of all employees involved in cash operations.
Machines Already Recommended
The latest directive builds on instructions issued in April, under which all bank branches or designated back offices were advised to install ultra-violet lamps or note authentication and sorting machines for counterfeit detection.
The RBI also asked banks to use their Forged Note Vigilance (FNV) cells to analyse counterfeit currency data, identify high-risk areas, monitor trends and improve awareness programmes.
If a counterfeit note is detected at a bank counter, the branch must issue an acknowledgement receipt to the customer after stamping the note. The receipt should carry a running serial number and be signed by both the cashier and the customer.
Banks have also been instructed to prominently display notices explaining this procedure at all branches to ensure greater transparency.
