Introduction
The Reserve Bank of India (RBI) has released a new Master Direction 2025 on April 1, 2025, regarding the detection, reporting, and monitoring of counterfeit (fake) currency notes. The aim is to stop the circulation of fake notes and ensure banks follow strict rules while handling them.
Here’s a simple breakdown of the new rules.
Detection and Impounding of Fake Notes
- Every bank branch must impound (seize) counterfeit notes.
- Fake notes will not be returned to customers and cannot be destroyed by branches.
- Once detected, the note will be stamped as “COUNTERFEIT NOTE” and recorded in a separate register.
- The customer will be given an acknowledgment receipt for the fake note.
No Credit for Counterfeit Notes
If you unknowingly deposit a fake note, the bank will not give you credit for it. RBI has clearly instructed that no money will be added to your account in exchange for counterfeit notes.
Reporting to Police
- If up to 4 fake notes are found in a single transaction → the bank will send a monthly report to the police.
- If 5 or more fake notes are found in one transaction → the bank must immediately file an FIR and hand over the notes to the police.
- Banks must always obtain an acknowledgment from police for notes handed over.
ATMs and Cash Handling Rules
- Banks must ensure that ₹100 and above notes are checked by machines before being recirculated.
- If fake notes come out of an ATM, the bank or ATM operator will face a fine.
- Special investigations can be ordered if a bank branch is found circulating a high number of fake notes.
Use of Technology
- All bank branches must have UV lamps and Note Authentication Machines.
- Currency chest branches must use high-capacity machines to check notes.
- Some banks may provide a note counting machine with dual display for public use at counters.
Forged Note Vigilance (FNV) Cell
- Every bank must set up a special FNV Cell at its head office.
- This cell will:
- Monitor counterfeit note cases.
- Report cases to RBI, police, FIU-IND, and NCRB.
- Conduct surprise checks at branches and currency chests.
- Monitor counterfeit note cases.
Staff Training and Public Awareness
- Bank staff handling cash must be trained to identify security features of genuine notes.
- RBI’s website Paisaboltahai shows the security features of all Indian currency notes.
- Banks must also display this information in branches for the public.
Penalties for Non-Compliance
If banks fail to properly detect or impound counterfeit notes, strict penalties apply:
- Fake ₹5, ₹10, ₹20 notes → recovery equal to the note value.
- Fake ₹50 notes → 50% extra penalty in addition to value recovery.
- Fake ₹100 and above → heavy penalties up to 200% of note value.
- Fake notes dispensed from ATMs → ₹10,000 fine per incident.
What Should Customers Do?
- Always withdraw and deposit money only from banks or ATMs.
- Check notes carefully after withdrawal.
- If you receive a fake note, do not panic – deposit it in a bank and collect a receipt.
- Never try to use or circulate a counterfeit note – it is a punishable crime.
Frequently Asked Questions (FAQs) on RBI Master Direction 2025 – Counterfeit Notes
1. What should I do if I get a counterfeit note from an ATM?
If you receive a fake note from an ATM, immediately inform the bank branch linked to that ATM. Deposit the note and collect an acknowledgment receipt. Do not try to use the note elsewhere, as it is a crime.
2. Will the bank refund money if I deposit a fake note?
No. RBI has clearly stated that no credit will be given to a customer’s account for counterfeit notes. The note will be impounded and reported to authorities.
3. Can the bank return the counterfeit note to me?
No. Banks are not allowed to return fake notes to customers. They must stamp the note as “COUNTERFEIT”, keep a record, and report it to the police.
4. Is it illegal to knowingly pass a fake note to someone else?
Yes. Circulating counterfeit notes is a criminal offence under Indian law. If you knowingly try to use a fake note, you could face legal action under the Bharatiya Nyaya Sanhita, 2023 and UAPA, 1967.
5. How can I identify a genuine Indian currency note?
RBI provides detailed information about security features of genuine notes on its official site Paisaboltahai. You can check for features like watermarks, security threads, micro-text, and color-changing ink.
6. What happens if a bank fails to impound counterfeit notes?
If a branch fails to seize fake notes, RBI will treat it as willful involvement in spreading counterfeit currency. The bank can face heavy penalties, and even special investigations may be ordered.
7. Are foreign counterfeit notes also covered under RBI rules?
Yes. The new Master Direction also covers foreign currency notes. If such notes are found, they are reported to the Interpol Wing of CBI for further investigation.
Conclusion
RBI’s Master Direction 2025 introduces strict rules for banks to detect and report counterfeit notes. Customers should also stay alert and follow the right steps if they come across a fake note. Together, banks and the public can help prevent the spread of counterfeit currency