RBI Directs Banks to Install Fake Currency Detection Machines at Branches Along International Borders
The RBI has directed banks to strengthen systems for detecting, seizing and reporting fake currency notes after finding the efforts of some banks inadequate. Banks must install note authentication or sorting machines at branches in international border districts and train all cash-handling employees to identify counterfeit notes by October 31, 2026.
The Reserve Bank of India (RBI) has directed banks to improve their systems for detecting fake currency notes. The RBI said that the efforts of some banks were not adequate and asked them to strengthen their processes for identifying, seizing and reporting counterfeit notes.
Machines Required at Branches Near International Borders
The RBI has asked banks to ensure that branches located in districts along international borders are equipped with note authentication or note sorting machines. These machines will help bank employees check whether currency notes are genuine or counterfeit.
Earlier, the RBI had instructed all bank branches and identified back offices to have facilities such as ultraviolet (UV) lamps, note sorting machines or authentication machines for detecting fake currency notes.
RBI’s Instructions on Counterfeit Notes
In April, the RBI issued comprehensive instructions to banks regarding the detection, reporting and monitoring of counterfeit currency notes. Under these rules, banks are required to check the authenticity of all currency notes they receive through machines.
If a counterfeit note is detected, the bank must impound it. The fake note should not be returned to the person who submitted it and should also not be destroyed by the bank.
Training for Cash Handling Employees
Banks are required to train employees who handle cash about the security features of genuine banknotes. This training will help employees identify fake Indian currency notes (FICNs) more effectively.
The RBI has asked banks to follow a focused and target-based approach while conducting awareness and refresher programmes for cash handling staff. Banks must ensure that all employees involved in handling cash receive the required training by October 31, 2026.
RBI Finds Efforts of Some Banks Inadequate
According to the RBI, an analysis showed that the efforts of some banks to detect counterfeit currency were not adequate. Therefore, banks have been asked to review their existing processes and improve their preparedness to identify, impound and report fake currency notes effectively.
Banks Asked to Identify Fake Currency Hotspots
The RBI has also asked Forged Note Vigilance (FNV) Cells of banks to regularly analyse counterfeit currency data. These cells should identify areas where fake currency cases are higher, monitor trends and take necessary measures.
Banks should use this information to focus their awareness programmes, employee training and other capacity-building efforts in areas where counterfeit currency cases are more common.
