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RBI/DCM/2024-25/115 DCM (FNVD)/G4/16.01.05/2024-25 April 01, 2024
The Chairman / Managing Director / Chief Executive Officer All Banks
Madam / Dear Sir,
Master Direction on Counterfeit Notes, 2024 – Detection, Reporting and Monitoring
The Reserve Bank of India (RBI) has, from time to time, issued several guidelines / instructions / directives to the banks on Counterfeit Notes.
A Master Direction incorporating and updating the extant guidelines / instructions / directives on the subject has been prepared to enable banks to have all current instructions on Counterfeit Notes at one place for reference.
This Direction has been issued in exercise of powers conferred upon RBI under Section 35A and Section 56 of the Banking Regulation Act, 1949.
Yours faithfully,
(Sanjeev Prakash) Chief General Manager
Encl: As above
| Para No. | Particulars |
|---|---|
| 1 | Authority to Impound Counterfeit Notes |
| 2 | Detection of Counterfeit Notes |
| 3 | Impounding of Counterfeit Notes |
| 4 | Issue of Receipt to Tenderer |
| 5 | Detection of Counterfeit Notes – Reporting to Police and other bodies |
| 6 | Examination of Banknotes Before Issuing over Counters, Feeding ATMs and Remitting to Issue Offices of RBI |
| 7 | Designating Nodal Bank Officer |
| 8 | Establishment of Forged Notes Vigilance Cell at Head Office of Banks |
| 9 | Provision of Devices Facilitating Detection of Counterfeit Notes |
| 10 | Reporting of Data to RBI / Government |
| 11 | Preservation of Counterfeit Notes Received from Police Authorities |
| 12 | Detection of Counterfeit Notes – Training of Staff |
| Annex | |
| Annex I | Counterfeit Banknote Stamp |
| Annex II | Acknowledgement Receipt to be Issued to the Tenderer of Counterfeit Notes |
| Annex III | Consolidated Monthly Report to the Police |
| Annex IV | Request for FIR to the Police |
| Annex V | Particulars of Forged Note Vigilance Cell (FNVC) to RBI |
| Annex VI | Monthly Report to RBI Issue Offices on Counterfeit Notes |
| Annex VII | Report on activities of FNV Cell – Half Year ended March / September |
| Annex VIII | Designs of Bank Notes Issued by the Reserve Bank of India since 1967 |
| Annex IX | List of Circulars Consolidated in this Master Direction |
In exercise of the powers conferred under Section 35A and Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India (RBI) being satisfied that it is necessary and expedient in the public interest to do so, hereby, issues the Directions hereinafter specified.
The Counterfeit Notes can be impounded by:
2.1 Banknotes tendered over the counter shall be examined for authenticity through machines. Similarly, banknotes received directly at the back office / currency chest through bulk tenders shall also be examined through machines.
2.2 No credit to customer’s account is to be given for Counterfeit Notes, if any, detected in the tender received over the counter or at the back-office / currency chest.
2.3 In no case, the Counterfeit Notes shall be returned to the tenderer or destroyed by the bank branches. Failure of the banks to impound Counterfeit Notes detected at their end will be construed as wilful involvement of the bank concerned in circulating Counterfeit Notes and penalty will be imposed.
Notes determined as counterfeit shall be stamped as "COUNTERFEIT NOTE" and impounded in the prescribed format (Annex I). Each such impounded note shall be recorded under authentication, in a separate register.
When a banknote tendered at the counter of a bank branch / back office and currency chest is found to be counterfeit, an acknowledgement receipt in the prescribed format (Annex II) must be issued to the tenderer, after stamping the note as in paragraph 3 ibid. The receipt, in running serial number, shall be authenticated by the cashier and tenderer. Notice to this effect shall be displayed prominently at the offices / branches for information of the public. The receipt is to be issued even in cases where the tenderer is unwilling to countersign it.
The following procedure shall be followed while reporting incidence of detection of Counterfeit Notes to the Police:
5.1 For cases of detection of Counterfeit Notes up to four (04) pieces in a single transaction, a consolidated report in the prescribed format (Annex III) shall be sent by the Nodal Bank Officer to the police authorities or the Nodal Police Station, along with the suspect Counterfeit Notes, at the end of the month.
5.2 For cases of detection of Counterfeit Notes of five (05) or more pieces in a single transaction, the Counterfeit Notes shall be forwarded immediately by the Nodal Bank Officer to the local police authorities or the Nodal Police Station for investigation by filing FIR in the prescribed format (Annex IV).
5.3 A copy of the monthly consolidated report / FIR shall be sent to the Forged Note Vigilance (FNV) Cell constituted at the Head Office of the bank.
5.4 Acknowledgement of the police authorities concerned has to be obtained for note/s forwarded to them (both for consolidated monthly statement and for filing of FIR). If the Counterfeit Notes are sent to the police by insured post, acknowledgement of receipt thereof by the police shall be invariably obtained and kept on record. A proper follow-up of receipt of acknowledgement from the police authorities is necessary. In case any difficulty is faced by the banks due to reluctance of the police to receive monthly consolidated statement / file FIRs, the matter may be sorted out in consultation with the Nodal Officer of the police authority designated to coordinate on matters relating to investigation of Counterfeit Note cases. The list of Nodal Police Stations may be obtained from the concerned Issue Office of RBI.
5.5 In order to facilitate identification of people abetting circulation of Counterfeit Notes, banks are advised to cover the banking hall / area and counters under CCTV surveillance and preserve the recording as per their internal policy.
5.6 Banks shall also monitor the patterns / trends of such detection and suspicious trends / patterns and bring to the notice of RBI / police authorities immediately.
5.7 The progress made by banks in detection and reporting of Counterfeit Notes to police, RBI, etc. and problems therein, shall be discussed regularly in the meetings of various State Level Committees viz., State Level Bankers’ Committee (SLBC), Standing Committee on Currency Management (SCCM), State Level Security Committee (SLSC), etc.
5.8 The data on detection of Counterfeit Notes by banks shall be included in the monthly returns forwarded to the concerned Issue Office of RBI as indicated in para 10 below.
5.9 The definition of 'counterfeiting' in the Indian Penal Code covers currency notes issued by a foreign government authority as well. In case of suspected foreign currency note received for opinion from the police and government agencies, etc., they shall be advised to forward the case to the Interpol Wing of the CBI, New Delhi after prior consultation with them.
5.10 The Government of India has framed Investigation of High Quality Counterfeit Indian Currency Offences Rules, 2013 under Unlawful Activities (Prevention) Act (UAPA), 1967. The Third Schedule of the Act defines High Quality Counterfeit Indian Currency Note. Activity of production, smuggling or circulation of High Quality Counterfeit Indian Notes has been brought under the ambit of UAPA, 1967.
