RBI/2016-17/22
DCM (FNVD) G–6/16.01.05/2016-17
July 20, 2016
The
Chairman / Managing Director,
Commercial Banks, Cooperative Banks, RRBs,
Private Banks, Foreign Banks and
Director of Treasuries of all States
Dear Sir / Madam,
Master Circular – Detection and Impounding of
Counterfeit Notes
Please refer to the Master Circular DCM
(FNVD) No.G-4/16.01.05/2015-16 dated July 1, 2015 (updated on 28 Sept 2015) consolidating the instructions issued
till Sept. 28, 2015, relating to Detection and Impounding of Counterfeit Notes.
The Master Circular has since been updated by incorporating the
instructions issued till date and has been placed on the RBI website rbi.org.in.
The Master Circular is a compilation of the
instructions contained in the circulars issued by RBI on the above subject
which are operational as on the date of this Circular.
Yours
faithfully,
(P
Vijaya Kumar)
Chief General Manager
Encl: Master Circular
INDEX
CONTENTS |
|
Para No |
Particulars |
1 |
Authority to Impound Counterfeit Notes |
2 |
Detection of counterfeit notes |
3 |
Impounding of Counterfeit notes |
4 |
Issue of Receipt to tenderer |
5 |
Detection of counterfeit notes – Reporting to Police and other
bodies |
6 |
Examination of Banknotes Before Issuing over Counters, Feeding
ATMs and Remitting to Issue Offices of RBI |
7 |
Designating Nodal Bank Officer |
8 |
Establishment of Forged Notes Vigilance Cell at Head Office of
Bank |
9 |
Provision of Ultra-Violet Lamp and Other Infrastructure |
10 |
Reporting of Data - (I) Bank Branches (II) Cooperative Banks
& RRBs |
11 |
Preservation of Counterfeit Notes Received from Police
Authorities |
12 |
Detection of Counterfeit Notes - Training of Staff |
|
Annex I |
|
Annex II |
|
Annex III |
|
Annex IV |
|
Annex V |
|
Annex VI |
|
Annex VII |
RESERVE BANK OF INDIA
DEPARTMENT OF CURRENCY MANAGEMENT
MASTER CIRCULAR – 2016-17
Detection and Impounding of Counterfeit Notes
Para 1 Authority to Impound Counterfeit Notes
The
Counterfeit Notes can be impounded by-
(i)
All branches of Public Sector Banks.
(ii) All branches of Private Sector Banks and Foreign Banks.
(iii) All branches of Co-operative Banks & Regional Rural Banks.
(iv) All Treasuries and Sub-Treasuries.
(v) Issue Offices of Reserve Bank of India.
Para 2 Detection of counterfeit notes
Banknotes tendered over the counter / received
directly at the back office / currency chest through bulk tenders should be
examined for authenticity through machines.
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.
In no case, the counterfeit notes should be
returned to the tenderer or destroyed by the bank branches / treasuries.
Failure of the banks to impound counterfeit notes detected at their end will be
construed as willful involvement of the bank concerned, in circulating
counterfeit notes and penalty will be imposed for violation of Directive
No.3158/09.39.00 (Policy)/2009-10 dated November 19, 2009 issued by the Reserve Bank.
Para 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.
Para 4 Issue of Receipt to Tenderer
When a banknote tendered at the counter of a
bank branch/back office and currency chest or treasury 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 Paragraph 2 ibid. The receipt, in running serial numbers, should
be authenticated by the cashier and tenderer. Notice to this effect should 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.
Para 5 Detection of Counterfeit Notes - Reporting to
Police and other bodies
The following procedure should be followed while
reporting incidence of detection of counterfeit note to the Police:
For cases of detection of counterfeit notes upto
4 pieces, in a single transaction, a consolidated report in the prescribed
format (Annex III) should 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.
For cases of detection of counterfeit notes of 5
or more pieces, in a single transaction, the counterfeit notes should be
forwarded 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).
A copy of the monthly consolidated report / FIR
shall be sent to the Forged Note Vigilance Cell constituted at the Head Office
of the bank (only in the case of banks), and in the case of the treasury, it
should be sent to the Issue Office of the Reserve Bank concerned.
Acknowledgement of the police authorities
concerned has to be obtained for note/s forwarded to them both as consolidated
monthly statement and FIR. If the counterfeit notes are sent to the police by
insured post, acknowledgement of receipt thereof by the police should 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 Offices / Branches due to reluctance of the police
to receive monthly consolidate statement / file FIRs, the matter may be sorted
out in consultation with the Nodal Officer of the police authority designated
to coordinate matters relating to investigation of counterfeit banknotes cases.
The list of Nodal Police Station may be obtained from the respective Regional
Office of Reserve Bank.
Banks should also monitor the patterns / trends
of such detection and suspicious trends / patterns should be brought to the
notice of RBI /Police authorities immediately.
The progress made by banks in detection and
reporting of counterfeit notes to Police, RBI, etc. and problems thereof,
should 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.
The data on detection of counterfeit Indian
notes at bank branches & treasuries should be included in the monthly
Returns forwarded to the Reserve Bank Issue Offices as indicated in para 10 below.
The definition of 'counterfeiting' in the Indian
Penal Code 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 should be advised to forward the
case to the Interpol Wing of the CBI, New Delhi after prior consultation with
them.
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
distribution and circulation of High Quality Counterfeit Notes has been brought
under the ambit of UAPA, 1967.
Para 6 Examination of the Banknotes before Issuing over
Counters, Feeding ATMs and Remitting to Issue Offices of the Reserve Bank
The banks should re-align their cash management
in such a manner so as to ensure that cash receipts 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. Any
non-compliance will be construed as violation of the Directive
No.3158/09.39.00 (Policy)/2009-10 dated November 19, 2009 issued by the Reserve Bank.
In order to obviate complaints regarding receipt
of counterfeit notes through ATMs, and to curb circulation of counterfeits, 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.
Detection of counterfeits in chest remittances
is also liable to be construed as willful 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.
Penalty at 100% of the notional value of
counterfeit notes, in addition to the recovery of loss to the extent of the
notional value of such notes, will be imposed under the following
circumstances:
a) When counterfeit notes are detected in the
soiled note remittance of the bank.
b) If counterfeit notes are detected in the
currency chest balance of a bank during Inspection / Audit by RBI
In terms of circular No.DPSS.CO.PD2298/02.10.002/2011-12
dated June 20, 2012, the responsibility of
ensuring the quality and genuineness of cash loaded at White Label ATMs would
be that of the Sponsor Bank.
Para 7 Designating Nodal Bank Officer
Each bank should designate Nodal Bank Officer,
district-wise and notify the same to the concerned Regional Office of RBI and
Police Authorities. All cases of reporting of counterfeit note detection as
indicated in Para 5 should be through the
Nodal Bank Officer. The Nodal Bank Officer will also serve as the contact point
for all counterfeit note detection related activities.
Para 8 Establishment of Forged Notes Vigilance Cell at
Head Office of Bank
Each bank shall establish at its Head Office, a
Forged Note Vigilance Cell to undertake the following functions:
i.
Dissemination of
instructions issued by the Reserve Bank on counterfeit notes to bank’s
branches. Monitoring the implementation of these instructions. Compilation of
data on detection of counterfeit notes, and its submission to Reserve Bank and
FIU-IND as per extant instructions. Follow-up of cases of counterfeit notes,
with police authorities / designated nodal officer.
ii.
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.
iii.
Conducting periodic
surprise checks at currency chests where shortages/ defective /counterfeit
notes etc. are detected.
iv.
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. Ensuring that only properly sorted and
machine examined banknotes are fed into the ATMs / issued over the counters and
to put in place adequate safeguards, including surprise checks, both during the
processing and in transit of notes.
Forged Note Vigilance Cell shall submit status
report on a quarterly basis covering the aforesaid aspects to the Chief General
Manager, Department of Currency Management, Reserve Bank of India, Central
Office, Amar Building, Fourth Floor, Sir P. M. Road, Fort, Mumbai 400 001, and
to the Issue office of the Regional office of Reserve Bank under whose
jurisdiction the FNV Cell is functioning, within a fortnight from the
conclusion of the quarter under report. The said report should be sent by mail. No hard copy need be sent.
In order to update the record of the addresses
of the Forged Note Vigilance Cells, the bank shall furnish by e-mail, in the
prescribed format (Annex V), the address etc.
particulars to the Reserve Bank every year, as on 1st July. No hard copy
need be sent.
Para 9 Provision of Ultra-Violet Lamp and Other
Infrastructure
With a view to facilitating the detection of
counterfeit notes, all bank branches / identified back offices should be
equipped with ultra-violet lamps / other appropriate banknote sorting /
detection machines. In addition, all currency chest branches should be equipped
with verification, processing and sorting machines and should be used to their
optimum capacity. Such machines should conform to the guidelines on 'Note Authentication and
Fitness Sorting Parameters' prescribed by the Reserve Bank in May 2010.
The banks shall maintain a daily record of the
notes processed through the Note Sorting machines, including the number of
counterfeits detected.
The banks should also consider providing at
least one counting machine (with dual display facility) for public use at the
counter.
Para 10 Reporting of Data to RBI
I By Bank branches
Data on counterfeit notes detected by all the
branches of the bank shall be reported in the prescribed format, on a monthly
basis. A statement (Annex VI) showing the details of
counterfeit notes detected in the bank branches during the month shall be
compiled and forwarded to the Issue Office of Reserve Bank concerned so as to
reach them by 7th of the next month.
Under Rule 3 of Prevention of Money Laundering
Rules, 2005, Principal Officers of banks are also required to report
information on cash transactions where forged notes have been used as genuine
note to The Director, FIU-IND, Financial Intelligence Unit- India, 6th Floor,
Hotel Samrat, Chanakyapuri, New Delhi-110021, within seven working days.
A “nil “report may be sent in case no
counterfeit has been detected during the month.
II By Co-operative Banks and Regional Rural Banks
Data on Counterfeit Notes detected by branches
of Co-operative Banks and Regional Rural Banks should be furnished on monthly
basis to the respective Issue Office of Reserve Bank in prescribed format (Annex VI).
Para 11 Preservation of Counterfeit Notes Received from
Police Authorities
All Counterfeit Notes received back from the
police authorities/courts may be carefully preserved in the safe custody of the
bank and a record thereof be maintained by the branch concerned. Forged Note
Vigilance Cell of the bank shall also maintain a branch-wise consolidated
record of such Counterfeit Notes.
These Counterfeit Notes at branches should be subjected
to verification on a half-yearly basis (on 31st March and 30th September) by the Officer-in- Charge of
the bank office concerned. They should be preserved for a period of three years from the date of receipt from the police
authorities.
They may thereafter be sent to the concerned
Issue Office of Reserve Bank of India with full details.
Counterfeit notes, which are the subject matter
of litigation in the court of law should be preserved with the branch concerned
for three years after conclusion of the court case.
Para 12 Detection of Counterfeit Notes - Training of
Staff
It is necessary to ensure that the cash handling
staff in banks and treasuries / sub-treasuries is fully conversant with the
security features of a banknote.
With a view to educating the branch staff on
detection of counterfeit notes, the design and security features of all the
banknotes shown in Annex VII have been supplied to all the banks / treasuries
with instructions to display them prominently at the branches for information
of the public. Posters of the 2005-06 series of banknotes have also been
supplied to bank branches for display at the branches. Posters of the 2005-06
series are also available for download in paisaboltahai.rbi.org.in.
The Controlling Offices / Training Centers should also organise / conduct training programmers on the security features of banknotes for members of staff to enable detection of counterfeit notes at the point of receipt itself. The banks should ensure that all bank personnel handling cash are trained on features of genuine Indian bank notes. The Reserve Bank will also provide faculty support and training materials.
Annex I
(Paragraph 3)
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.
COUNTERFEIT BANKNOTE IMPOUNDED
BANK / TREASURY/ SUB-TREASURY
BRANCH / CURRENCY CHEST
SIGNATURE
DATE
Annex II
(Paragraph 4)
Format – Acknowledgement Receipt to be issued to the tenderer of
counterfeit notes
Name of the Bank / Treasury/ Sub-treasury:
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.
Serial number of the note deemed as counterfeit |
Denomination |
Parameter on which the note is deemed as counterfeit |
|
|
|
Total number of counterfeit notes:
(Signature of the Tenderer)
(Signature of the counter staff)
Annex III
(Paragraph 5)
Consolidated Monthly Reporting for the month of
________
1. Name of the Bank / District:
2. Name and Address of the Nodal Officer:
3. Detail of counterfeit notes:
Date of detection |
Name of branch / currency chest |
Details of tenderer |
Denominations / pieces / serial numbers |
Security features breached |
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4. The counterfeit notes are enclosed.
5. Kindly acknowledge receipt.
(Authorised signatory)
Encl:
Annex- IV
(Paragraph 5)
Name
of the Bank:
District:
Name and Address of the Nodal Bank Officer:
Ref. No. Date:
The
Sr. 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 forged
Indian Currency Notes is an offence under Sections 489A to 489E of the Indian
Penal Code, 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 292(1) and 292(3) of the Code of Criminal Procedure) for examination.
The expert opinion furnished may be produced in the court as evidence under
Section 292 of the Criminal Procedure Code. 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.
Denominations /Number of pieces |
Serial Number |
Notional Value |
Details of tenderer |
Name and Address of the branch / currency chest where detection
took place |
Bank’s Entry No |
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3. The counterfeit notes are enclosed.
4. Please acknowledge receipt.
Yours faithfully,
Authorized Signatory
Encl:
Annex V
(Paragraph 8)
FORMAT FOR FURNISHING ADDRESS ETC. PARTICULARS
OF FORGED NOTE VIGILANCE CELL (FNVC) TO RBI
(TO BE FURNISHED BY E-MAIL ON 1ST JULY EVERY
YEAR)
REF: MASTER CIRCULAR DATED JULY1, 2012 ISSUED BY RBI
NAME OF THE BANK |
ADDRESS OF FNVC (WITH PIN CODE) |
NAME AND DESIGNATION OF OFFICER-IN-CHARGE |
TELEPHONE NO (WITH CODE). |
FAX NO. (WITH CODE) |
E-mail Address of the FNVC |
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We note to intimate immediately the changes, if
any, in the particulars furnished above
Name
of Authorised Official:
Designation:
Date:
NB: The completed format
should be transmitted by e-mail, in MS-Excel on the following address-
E-mail
(No
hard copy need be sent)
Annex VI
(Paragraph 10)
Name
of the bank /District:
Statement showing the details of counterfeit banknotes detected in the
_______________ during the month of _______________
A.
Details of counterfeit notes detected:
Name of branch / currency chest |
Type of detection |
Denomination-wise Details in pieces |
Total pieces |
|||||
10 |
20 |
50 |
100 |
500 |
1000 |
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FIR |
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Non-FIR |
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Pieces of notes
processed |
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B) Details of cases filed with police:
|
Pending with Police at the beginning of the month |
Sent to Police during the month under report |
Returned by the Police |
Pending with the Police at the end of the month |
No. of cases |
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No. of pieces |
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NB: Each FIR lodged comprises one case. The
total number of forged notes covered by the FIR may be indicated in each of the
columns above.
Forwarded to: -
1. The General Manager/Deputy General Manager,
Reserve Bank of India, Issue
Department, ____________
(Signature)
Name & Designation of the Authorised
Official
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