Detection and Reporting Mechanism of Counterfeit Notes – Monetary Policy Statement 2012-13

Mechanism on Sorting / Processing of banknotes introduced advising the banks that banknotes in the denomination of 100 and above may be re-issued over their counters or through ATMs, only if such banknotes have been duly checked for authenticity / genuineness by machines. Further, the banks were also advised to use such machines in all bank branches with average daily cash receipt of ` 50 lakh and above, within a definite time frame.

 In light of Para 127 of the Monetary Policy Statement 2012-13 announced by RBI Governor on April 17, 2012 (copy enclosed), banks should now re-align their cash management in such a manner so as to ensure that cash receipts in the denominations of ` 100 and above should not be put into re-circulation without the notes being machine processed for authenticity.

The above instructions shall come into effect immediately and are applicable to all bank branches, irrespective of the volume of daily cash receipt.

Counterfeit-note detection: mandatory machine authentication before reissuing high-denomination cash to prevent circulation of unauthenticated notes. Banks must ensure banknotes of denominations of one hundred and above are authenticated by machines before reissuance over counters or through ATMs. This mandatory machine authentication conditions re-circulation of high-denomination notes and applies immediately to all branches irrespective of daily cash-volume, requiring realignment of cash-management processes so received high-denomination notes are not put back into circulation without machine processing for authenticity.