The Reserve Bank of India (RBI), through its Master Direction updated as of September 01, 2026, has consolidated and updated the existing instructions for banks regarding the detection, reporting and monitoring of Counterfeit Notes. The earlier circulars and Master Directions listed in Annex IX stand withdrawn from the date of issuance of this Master Direction.
The following has been stated:
Banks and RBI Issue Offices are authorised to impound Counterfeit Notes. Banknotes tendered over the counter and received through back offices or Currency Chests must be examined for authenticity using machines. No credit shall be provided to customers for Counterfeit Notes, and such notes must neither be returned to the tenderer nor destroyed by banks.
Counterfeit Notes must be stamped and recorded in a separate register, and an acknowledgement receipt must be issued to the tenderer. For up to four counterfeit notes detected in a single transaction, banks must submit a consolidated monthly report to the police, while cases involving five or more notes require immediate forwarding to the police along with filing of an FIR.
Each bank must designate district-wise Nodal Bank Officers and establish a Forged Note Vigilance (FNV) Cell at its Head Office to monitor compliance, compile detection data, coordinate with authorities and ensure proper processing of banknotes.
Banks must ensure that banknotes of ₹100 and above are machine processed for authenticity before being re-circulated. Adequate safeguards must also be implemented before loading ATMs, and the dispensing of Counterfeit Notes through ATMs may attract action against the concerned bank.
The FNV Cells must submit monthly reports on Counterfeit Notes to the concerned RBI Issue Office by the 7th of the following month, including Nil reports where no counterfeit notes are detected. Information must also be reported to FIU-IND and uploaded on the NCRB portal as prescribed.
Banks are also required to preserve Counterfeit Notes received back from police authorities or courts for the prescribed period, provide regular training to cash-handling staff, and ensure that personal data collected for compliance purposes is processed in accordance with the Digital Personal Data Protection Act, 2023 and applicable rules.
Please refer to the document attached below for more details.
[Circular No.: RBI/DCM/2026-27/394]
