Daijiworld Media Network - New Delhi

New Delhi, Jul 31: The Reserve Bank of India (RBI) on Friday directed banks to equip branches in districts bordering neighbouring countries with note authentication and sorting machines to strengthen the detection of counterfeit currency.

The directive follows the central bank's observation that some banks had not taken adequate measures to identify fake currency notes.

In a circular, the RBI instructed banks to ensure that all banknotes received are examined for authenticity using note authentication machines and that counterfeit notes are impounded in every case.

It also directed banks to train all employees handling cash on the security features of genuine banknotes to improve their ability to detect counterfeit currency.

The RBI clarified that counterfeit notes must neither be returned to the person tendering them nor destroyed at the bank. Instead, all detected Fake Indian Currency Notes (FICNs) must be dealt with in accordance with the prescribed guidelines.

Referring to instructions issued in April, the central bank reiterated that all bank branches or designated back offices should be equipped with ultraviolet lamps or note sorting and authentication machines to facilitate the identification of counterfeit notes.

The RBI further asked banks to adopt a focused, target-based approach for conducting awareness and refresher programmes for cash-handling staff on the security features of genuine banknotes and the detection of counterfeit currency.

"It shall be ensured that all the cash handling staff of the bank are imparted training positively by October 31, 2026," the circular stated.

The central bank also directed banks to utilise their Forged Note Vigilance (FNV) cells to analyse counterfeit currency data, identify hotspots, monitor trends and strengthen awareness and capacity-building initiatives accordingly.

Under the April guidelines, the RBI had also mandated that whenever a counterfeit note is detected at a bank branch or back office, the bank must issue an acknowledgement receipt in the prescribed format to the person who tendered the note after stamping it.

The receipt, bearing a running serial number, must be authenticated by both the cashier and the tenderer, while a notice informing customers of the procedure should be displayed prominently at bank branches, the RBI said.