RBI Tightens Counterfeit Security: Strict New Rules For Bank Branches Near International Borders

The Reserve Bank on Friday asked banks to ensure that all branches in international border areas are equipped with note authentication/sorting machines. The central bank noted that efforts of some of the lenders were not adequate for the detection of counterfeit currency.

Earlier, in a master direction issued in April, the central bank prescribed comprehensive instructions to the banks on detection, reporting, and monitoring of counterfeit notes.

All Employees Need To Be Trained

Banks are requiring all cash handling staff to be trained on the security features of genuine banknotes to enable them to detect counterfeit notes.

Furthermore, all banknotes received by the bank will be machine-verified; counterfeit notes must be confiscated, and under no circumstances should they be returned to the bidder or destroyed at the bank.

All detected Fake Indian Currency Notes (FICN) must also be reported, as per established guidelines.

"However, an analysis by the Reserve Bank suggests that efforts of some of the banks in the matter were not adequate," the central bank said in a circular, which asked the banks to review their processes to further strengthen their capacity and preparedness to identify, impound and report FICNs effectively.

Measures For Bank Branches Near International Borders

Banks have also been advised to take certain steps.

In addition to the existing guidelines, the circular states, "Banks must ensure that branches in districts bordering international borders have note authentication/sorting machines."

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According to the guidelines issued in April, all bank branches/identified back offices must have ultraviolet lamps/note sorting/authentication machines to facilitate the detection of counterfeit notes.

The RBI has also asked banks to adopt a focused and targeted approach to conduct awareness and/or refresher programs on security features and FICN identification of genuine banknotes for cash handling staff.

The circular states that positive training for all bank cash management staff will be confirmed by October 31, 2026.

Lenders have also been asked to get their Forged Notes Vigilance (FNV) cells to analyse their banks' FICN data to identify hotspots (if any), monitor trends and focus their outreach and capacity building efforts accordingly.

With Inputs From PTI