RBI/DCM/2025-26/132
DCM (FNVD)/G4/16.01.05/2025-26

April 01, 2025

The Chairman / Managing Director / Chief Executive Officer
All Banks

Madam / Dear Sir,

Master Direction on Counterfeit Notes, 2025 – Detection, Reporting and Monitoring

In exercise of powers conferred under Section 35A and Section 56 of the Banking Regulation Act, 1949, Reserve Bank of India (RBI), from time-to-time issues guidelines/ instructions / directives to the banks on detection, reporting and monitoring of Counterfeit Notes.

2. 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 and the same is enclosed.

Yours faithfully,

(Suman Nath)
Chief General Manager

Encl: As above

Index

Master Direction on Counterfeit Notes, 2025 – Detection, Reporting and Monitoring

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.

1. Authority to Impound Counterfeit Notes

The Counterfeit Notes can be impounded by:

1. All banks

2. Issue Offices of RBI

2. Detection of Counterfeit Notes

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.

3. Impounding of Counterfeit Notes

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.

4. Issue of Receipt to Tenderer

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 para 3 above. 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.

5. Detection of Counterfeit Notes – Reporting to Police and other bodies

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. The list of Nodal Police Stations may be obtained from the concerned Issue Office of RBI.

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.

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 Bharatiya Nyaya Sanhita, 2023 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.

6. Designating Nodal Bank Officer

Each bank shall designate a Nodal Bank Officer, district-wise to serve as the contact point for all Counterfeit Note detection related activities and notify the same to the concerned Issue Office of the RBI and police authorities. All cases of reporting of Counterfeit Note detection as indicated in Para 5 shall be done through the Nodal Bank Officer.

7. Examination of the Banknotes before Issuing over Counters, Feeding ATMs and Remitting to Issue Offices of RBI

7.1 The banks shall re-align their cash management in such a manner so as to ensure that banknotes in the denominations of ₹100 and above are not put into re-circulation without the notes being machine processed for authenticity. The said instructions shall be applicable to all bank branches, irrespective of the volume of daily cash receipt.

7.2 In order to obviate complaints regarding dispensation of Counterfeit Notes from ATMs, and to curb circulation of Counterfeit Notes, it is imperative to put in place adequate safeguards / checks before loading ATMs with notes. Dispensation of Counterfeit Notes through the ATMs would be construed as an attempt to circulate the Counterfeit Notes by the bank concerned. This shall also be applicable to White Label ATM Operators in terms of circular DPSS.CO.OD.No.1916/06.07.011/2018-19 dated March 7, 2019.

7.3 Detection of Counterfeit Notes in chest remittances is also liable to be construed as wilful involvement of the chest branches concerned in circulating Counterfeit Notes and may attract special investigation by police authorities, and other action like suspending the operation of the chest concerned.

8. Provision of Devices Facilitating Detection of Counterfeit Notes

8.1 With a view to facilitate the detection of Counterfeit Notes, all bank branches / identified back offices shall be equipped with ultra-violet lamps / Note Sorting / Authentication Machines. In addition, all currency chest branches shall be equipped with verification, processing and sorting machines and shall be used to their optimum capacity. Such machines shall conform to the guidelines on 'Note Authentication and Fitness Sorting Parameters' prescribed by the RBI from time to time, as also, the Indian Standards duly certified by Bureau of Indian Standards (BIS) as required in terms of circular DCM(NPD)No.S2193/09.45.000/2024-25 dated October 30, 2024.

8.2 The banks shall maintain a daily record of the notes processed through the Note Sorting Machines, including the number of counterfeits detected.

8.3 The banks shall also consider providing at least one note counting machine (with dual display facility) for public use at the counter.

9. Establishment of Forged Note Vigilance Cell at Head Office of Bank

9.1 Each bank shall establish at its Head Office, a Forged Note Vigilance (FNV) Cell to undertake the following functions:

1. Dissemination of instructions issued by RBI on Counterfeit Notes to bank’s branches / Currency Chests (CCs), monitoring the implementation of these instructions, compilation of data on detection of Counterfeit Notes, and its submission to RBI, Financial Intelligence Unit-India (FIU-IND) and National Crime Records Bureau (NCRB) as per extant instructions and follow-up of cases of Counterfeit Notes with police authorities / designated nodal officer.

2. Sharing of the information thus compiled with bank’s CVO and report to him / her all cases of acceptance / issue of Counterfeit Notes over the counters.

3. Conducting periodic surprise checks at currency chests where shortages / defective / Counterfeit Notes, etc., are detected.

4. Ensuring operation of Note Sorting Machines of appropriate capacity at all the currency chests / back offices and closely monitoring the detection of Counterfeit Notes and maintaining the record of the same.

5. Ensuring that only properly sorted and machine examined banknotes are fed into the ATMs / issued over the counters by putting in place adequate safeguards, including surprise checks, both during the processing and transit of notes.

9.2 FNV Cell shall submit a status report on a half-yearly basis (as at the end of March and September every year), as per the format prescribed in Annex V by e-mail, to the Chief General Manager, Department of Currency Management, RBI, Central Office, Amar Building, Fourth Floor, Sir P. M. Road, Fort, Mumbai 400 001 (dcmfnvd@rbi.org.in) and to the concerned Issue office of RBI under whose jurisdiction the FNV Cell is functional, within a fortnight from the end of the respective half-year.

9.3 In order to update the record of the addresses of the FNV Cells, the bank shall furnish by e-mail, in the prescribed format (Annex VI), the particulars to the Chief General Manager, Department of Currency Management, Reserve Bank of India and to the concerned Issue office of RBI under whose jurisdiction the FNV Cell is functional, by 15th of April, every year.

10. Reporting of Data to RBI / NCRB / FIU-IND

10.1 By FNV Cells of banks

Data on Counterfeit Notes detected by all branches and currency chests of the bank shall be compiled and reported by FNV Cell of the concerned bank to the Issue Office of RBI under whose jurisdiction the FNV Cell is functional. The reporting shall be made in the format (Annex VII) on monthly basis, by 7th of the following month. In case, no counterfeit note has been detected during the month, a “Nil” report shall be sent.

10.2 Under Rule 8 (1) of Prevention of Money Laundering (Maintenance of Records) Amendment Rules, 2013, Principal Officers of banks shall report information on cash transactions where Counterfeit Notes have been detected to FIU-IND, by the 15th day of the succeeding month, by uploading the information on the FINnet Portal. Similarly, data on Counterfeit Notes detection shall be uploaded on the web-enabled software of NCRB, New Delhi on their website.

11. Penal Provisions

The following penal provisions are applicable for counterfeit notes detected in soiled note remittances / balances in currency chest (CC) / ATM dispensations / disbursement over the counter or for willful non-impounding by the bank:

11.1 Counterfeit notes detected in soiled notes remittances

1. Denominations of ₹5, ₹10 and ₹20: Recovery of loss to the extent of notional value of counterfeit notes.

2. Denomination of ₹50: A penalty at 50% of notional value of counterfeit notes in addition to the extent of recovery of notional value of counterfeit notes.

3. Denomination of ₹100 and above: A graded penalty linked to counterfeit notes per million (CPM) pieces of soiled notes processed at RBI for a particular CC in a single remittance as per the following structure, in addition to the recovery of notional value of counterfeit notes:

11.2 Counterfeit notes detected in CC balance during inspection / audit by RBI

1. Denominations of ₹5, ₹10 and ₹20: Recovery of loss to the extent of notional value of counterfeit notes.

2. Denomination of ₹50: A penalty at 50% of notional value of counterfeit notes in addition to the extent of recovery of notional value of counterfeit notes.

3. Denomination of ₹100 and above: A penalty at 200% of notional value of counterfeit notes in addition to the extent of recovery of notional value of counterfeit notes.

11.3 Counterfeit notes detected in ATM dispensations/ disbursement over the counter or wilful non-impounding of counterfeit notes detected at the banks

A monetary penalty of ₹10,000 (Rupees Ten Thousand) per instance shall be imposed for Counterfeit notes detected in ATM dispensations/ disbursement over the counter or for wilful non-impounding of counterfeit notes detected at the banks. This shall also be applicable to White Label ATM Operators.

Illustrative examples on calculation of penalty as per the aforesaid provisions are furnished in Annex VIII.

12. Preservation of Counterfeit Notes Received from Police Authorities

12.1 Counterfeit Notes received back from the police authorities / courts shall be carefully preserved in the safe custody of the bank and a record thereof be maintained by the branch / CC concerned. FNV Cell of the bank shall also maintain a branch / CC-wise consolidated record of such Counterfeit Notes.

12.2 These Counterfeit Notes at branches / CCs shall be subjected to verification on a half-yearly basis (on 31st March and 30th September) by the Officer-in-Charge of the bank concerned. They shall be preserved for a period of three years from the date of receipt from the police authorities.

12.3 Counterfeit Notes, which are subject matter of litigation in the court of law shall be preserved with the branch / CC concerned for three years after conclusion of the court case.

12.4 After the preservation period, such notes shall be sent to the concerned Issue Office of RBI under whose jurisdiction the branch / CC is functioning, with full details of the case.

13 Detection of Counterfeit Notes – Training of Staff

13.1 It is necessary to ensure that the cash handling staff in banks are fully conversant with the security features of a banknote.

13.2 With a view to educating the branch staff on detection of Counterfeit Notes, the information on design and security features of all the banknotes has been furnished in Annex IX. Banks may display them prominently at the branches for information of the public. Details of security features of the New Design banknotes of ₹2000, ₹500, ₹200, ₹100, ₹50, ₹20 and ₹10 are available at the link /en/web/rbi/rbi-kehta-hai/know-your-banknotes.

13.3 The controlling offices / training centres shall also organise / conduct training programmes on the security features of genuine Indian banknotes for all bank personnel handling cash to enable detection of Counterfeit Notes at the point of receipt itself. These trainings shall cover detection, impounding and reporting of Counterfeit Notes. RBI will provide faculty support and training materials, whenever necessary.

Annex I

Counterfeit Banknote Stamp

Each banknote, which on examination of various security features / parameters, is determined as a counterfeit one, shall be branded with a stamp "COUNTERFEIT BANKNOTE". For this purpose, a stamp with a uniform size of 5 cm x 5 cm with the following inscription may be used.

Annex II

Acknowledgement Receipt to be Issued to the Tenderer of Counterfeit Notes

Name of the Bank:
Address:

Serial Number of the Receipt: ________
Date: __________

The note(s) described below received from……………………………. (Name and address of the tenderer) is/are counterfeit and has/have therefore been impounded and stamped accordingly.

Total number of Counterfeit Notes:

(Signature of the Tenderer)

(Signature of the Counter Staff)

(Official Seal)

Annex III

Consolidated Monthly Report to the Police

Date: _____________

Name of the Bank:
District:
Name and Address of the Nodal Bank Officer:
Ref. No.…………

The Inspector of Police
___________Police Station,

Consolidated Report for the month of ________

Detail of Counterfeit Notes:

2. The Counterfeit Notes are enclosed for information and necessary action.

3. Kindly acknowledge receipt.

Yours faithfully,

Authorised signatory
Official Seal

Encl:

Annex IV

Request for FIR to the Police

Date: _____________

Name of the Bank:
District:
Name and Address of the Nodal Bank Officer:
Ref. No.…………

The Inspector of Police
___________Police Station,

Dear Sir,

Detection of Counterfeit Note/s – Request for investigation

We enclose the following Counterfeit Notes detected in our office on ________. The details of the Counterfeit Notes are furnished below:

2. As the printing and/or circulation of Fake Indian Currency Notes is an offence under Sections 178 to 182 of the Bharatiya Nyaya Sanhita, 2023, we request you to lodge FIR and conduct the necessary investigation. In case, it is decided to file criminal proceedings in the court of law, you may first arrange to send the notes to any of the Note Printing Presses, Forensic Science Laboratories, etc., in terms of the provisions of Section 398 (1) and 398 (3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 for examination. The expert opinion furnished may be produced in the court as evidence under Section 398 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The forged notes may please be returned to us after the completion of the investigation and/or proceedings in the court of law along with the detailed report of the investigation / decision of the court.

3. Please acknowledge receipt.

Yours faithfully,

Authorised Signatory
Official Seal

Encl:

Annex V

Report on activities of FNV Cell - Half Year ended March / September

Name of the bank:

Address of FNV Cell:

Name and designation of officer-in-charge of FNV Cell:

Telephone No.:

Email ID:

(Signature)
Name & Designation of the Authorised Official
Official Seal

Annex VI

Particulars of Forged Note Vigilance Cell (FNVC) To RBI

We note to intimate immediately, the changes, if any, in the particulars furnished above.

Name of Authorised Official:
Designation:
Date:

NB: The completed format, in MS-Excel, shall be transmitted by e-mail to dcmfnvd@rbi.org.in and to the concerned Issue Office of RBI under whose jurisdiction the FNV Cell is functional, by 15th April every year.

Annex VII

Monthly Report to RBI Issue Offices on Counterfeit Notes

Date: _______________

Name of the Bank:
Address of FNV Cell:
Name and Designation of officer-in-charge:
Telephone No:
Email ID:

Counterfeit Notes detected in the bank during the month
(To be reported by 7th of following month)

A. Details of Counterfeit Notes detected:

B. Details of FIR cases filed with police:

* Each FIR lodged comprises one case.

(Signature)
Name & Designation of the Authorised Official
Official Seal

Forwarded to: -

The General Manager/Deputy General Manager, Reserve Bank of India, Issue
Department, ____________

Annex VIII

Illustrative examples on calculation of Penalty as per the Penal Provisions prescribed under Para 11

(I) Counterfeit notes detected in soiled note remittances

A currency chest has sent the following soiled notes remittance to an Issue Office of RBI for processing and the below mentioned counterfeit notes are detected:

Then the penalty imposed as per the revised provisions for the counterfeit notes detected shall be as under:

1. Denominations of ₹5, ₹10 and ₹20: Recovery of notional value of counterfeit notes i.e., ₹20*4 = ₹80.

2. Denomination of ₹50: Recovery of notional value of counterfeit notes i.e., ₹50*9 = ₹450 and penalty @ 50% of the notional value i.e., ₹225, i.e., a total of ₹675 shall be recovered.

3. Denomination of ₹100 and above: Recovery of notional value of counterfeit notes i.e., ₹100*40 + ₹200*2 + ₹500*2 + ₹2000*1 = ₹7400 and penalty as per CPM of 30.57 (>20), i.e., @ 200% of notional value = ₹14800.
   CPM = [(40+2+2+1) * 10,00,000] / [1192000+90000+170000+20000] = 30.57.

(II) Counterfeit notes detected in the CC balance during inspection / audit by RBI

During the audit/inspection of currency chest by Issue Office, RBI. the following counterfeit notes are detected:

Then the penalty imposed as per the revised provisions for counterfeit notes detected would be as under:

1. Denominations of ₹5, ₹10 and ₹20: Recovery of notional value of counterfeit notes i.e., ₹10*4 + ₹20*2 = ₹80.

2. Denomination of ₹50: Recovery of notional value of counterfeit notes i.e., ₹50*8 = ₹400 and penalty @ 50% of the notional value i.e., ₹200, totaling ₹600.

3. Denomination of ₹100 and above: Recovery of notional value of counterfeit notes i.e., ₹100*16 + ₹200*20 + ₹500*15 + ₹2000*10 = ₹33,100 and penalty @ 200% of the notional value i.e., ₹66,200. A total of ₹99,300 shall be recovered.

(III) Counterfeit notes detected in ATM dispensations/ disbursement over the counter or for wilful non-impounding of counterfeit notes detected at the banks

The following violations, if established during inspection/ audit of a currency chest/ FNV Cell of bank by RBI officials or based on a complaint received from public:

1. Counterfeit notes returned to the tenderer without impounding

2. Disbursement of counterfeit notes over the counter

3. Dispensation of counterfeit notes through ATMs.

For each instance of such violation, a monetary penalty of ₹10,000/- shall be imposed.

Annex IX

Designs of Bank Notes Issued by the Reserve Bank of India since 1967

Annex X

List of Circulars Consolidated/ Referred in this Master Direction