The Reserve Bank of India (RBI) has directed all banks to strengthen their systems for the detection, impounding, reporting, and monitoring of Fake Indian Currency Notes (FICNs) after identifying gaps in compliance with the Master Direction on Counterfeit Notes – Detection, Reporting and Monitoring dated April 1, 2026. Banks have been reminded that all banknotes received must be authenticated using machines, counterfeit notes must be impounded and never returned or destroyed, and all detected FICNs must be reported in accordance with prescribed guidelines.
To strengthen detection capabilities, banks have been instructed to conduct mandatory training and refresher programmes for all cash-handling staff on identifying genuine banknotes and counterfeit notes by October 31, 2026, with branches located in international border districts required to complete training by September 15, 2026. Action Taken Reports (ATRs) must be submitted to the respective RBI Issue Offices by September 22, 2026 (for border branches) and November 7, 2026 (for all branches). Additionally, banks must ensure that branches in border districts are equipped with Note Authentication/Sorting Machines, while their Forged Note Vigilance Cells (FNV Cells) should analyse counterfeit note data to identify hotspots and strengthen awareness initiatives.
Further, RBI has directed banks to establish an effective monitoring mechanism to ensure compliance with all provisions of the Master Direction. Banks are required to submit their action plan and progress report on compliance to the Department of Currency Management by September 15, 2026. Failure to comply with the prescribed guidelines may attract regulatory penalties, particularly in cases involving counterfeit notes detected in currency remittances, currency chests, ATMs, over-the-counter payments, or failure to impound counterfeit notes.
[RBI/2026-27/220]
