Fake Indian Currency Notes (FICNs)-Detection, Reporting and Monitoring
The Reserve Bank of India has directed all banks to strengthen processes for identifying, impounding, and reporting Fake Indian Currency Notes (FICNs). Banks must implement a target-based training program for all cash-handling staff regarding genuine banknote security features, with specific completion deadlines for general staff and those in border areas. Additionally, branches located in districts with international borders must be equipped with Note Authentication or Sorting Machines. Banks are required to establish internal monitoring mechanisms to ensure compliance with the Master Direction on Counterfeit Notes and must submit an Action Taken Report and a detailed plan of action to the Reserve Bank by the specified deadlines.
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The Reserve Bank of India has directed all banks to strengthen processes for identifying, impounding, and reporting Fake Indian Currency Notes (FICNs). Banks must implement a target-based training program for all cash-handling staff regarding genuine banknote security features, with specific completion deadlines for general staff and those in border areas. Additionally, branches located in districts with international borders must be equipped with Note Authentication or Sorting Machines. Banks are required to establish internal monitoring mechanisms to ensure compliance with the Master Direction on Counterfeit Notes and must submit an Action Taken Report and a detailed plan of action to the Reserve Bank by the specified deadlines.
- Who is affected
- All banks operating in India
- Required action
- Conduct training and awareness programs for all cash-handling staff on security features and FICN detection.
- Equip branches in districts with international borders with Note Authentication or Sorting Machines.
- Submit Action Taken Reports and compliance plans to the Reserve Bank.
- Key dates
- Deadline for training staff in border area branches — 14 Sept 2026
- Deadline for submission of monitoring plan of action — 14 Sept 2026
- Deadline for ATR submission for border area staff training — 21 Sept 2026
- Deadline for training all cash-handling staff — 30 Oct 2026
- Consequences
- Banks face penalties for breaching guidelines, including failure to impound counterfeit notes or detection of FICNs in remittances and ATM dispensations.
Source details
- Source
- Reserve Bank of India
- Type
- notification
- Published by source
- 30 Jul 2026
- Document number
- RBI/2026-27/220
- Issuing division
- Department of Currency Management
- Coverage area
- banking
Document text
RBI/2026-27/220 DCM (FNVD) No.S1335/16.01.05/2026-27 July 31, 2026
The Chairman/ Managing Director/ Chief Executive Officer All Banks
Madam/ Dear Sir,
Fake Indian Currency Notes (FICNs)-Detection, Reporting and Monitoring
Master Direction (MD) on Counterfeit Notes – Detection, Reporting and Monitoring dated April 01, 2026, prescribes comprehensive instructions to the banks on detection, reporting, and monitoring of counterfeit notes. In this regard, the banks are mandated to train all their employees handling cash about the security features of genuine banknotes to enable them for detecting counterfeit notes. All banknotes received by the bank shall be examined for authenticity through machines, counterfeit notes should be impounded in all cases and in no case the counterfeit note shall be returned to tenderer or destroyed at the bank. All detected FICNs should be reported, as per prescribed guidelines. The bank shall be penalized for breach of the guidelines of the referred MD, such as detection of counterfeit notes in currency remittances to RBI/ currency chest balances/ ATM dispensations/ over-the-counter payments, non-impounding of counterfeit notes, etc.
- However, an analysis by the Reserve Bank suggests that efforts of some of the banks in the matter were not adequate. Accordingly, the banks are advised to review their processes so as to further strengthen their capacity and preparedness to identify, impound and report FICNs effectively. In this regard, the banks are also advised to undertake the following specific measures -
i. Training and Awareness Programme a) Adopt a focused and target-based approach for conducting awareness and/ or refresher programs for cash handling staff on the security features of genuine banknotes and detection of FICNs. It shall be ensured that all the cash handling staff of the bank are imparted training positively by October 31, 2026. b) The staff posted in bank branches located in border areas shall be imparted the training on priority basis, latest by September 15, 2026. c) An Action Taken Report (ATR) shall be submitted on compliance of the instructions at para (a) and (b) above through the Forged Note Vigilance Cells (FNV Cell) to the concerned Issue Office of Reserve Bank by November 7, 2026, and September 22, 2026, respectively.
ii. Provision of Devices Facilitating Detection of Counterfeit Notes In addition to the instructions at para 8 of the referred MD the banks shall ensure that the branches in the districts with international borders are equipped with Note Authentication/ Sorting Machines.
iii. The FNV Cell of banks shall analyse the FICN data of their bank to identify hotspots (if any), monitor trends and focus their outreach and capacity-building efforts accordingly.
- Compliance to the instructions in Master Direction Banks are advised to institute a monitoring mechanism to ensure compliance of all the provisions of the referred MD. Details of the plan of action along with progress shall be submitted by September 15, 2026, to the Department of Currency Management at dcmfnvd@rbi.org.in.
Yours faithfully,
(Jagdamba Prasad Bansal) Chief General Manager
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