RBI/2017-18/26
DCM (FNVD) G – 4/16.01.05/2017-18
July
20, 2017
The Chairman/ Managing Director
/Chief Executive Officer
All 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) G-6/16.01.05/2016-17 dated July 20, 2016 consolidating
the instructions issued till July 20, 2016, 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 to RBI
|
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 – 2017-18
Detection
and Impounding of Counterfeit Notes
Para 1- Authority to Impound
Counterfeit Notes
The Counterfeit Notes can be
impounded by-
(i) All Banks
(ii) All Treasuries and Sub-Treasuries.
(iii) 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 wilful involvement of the bank concerned in
circulating counterfeit notes and penalty will be imposed.
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.
In order to facilitate
identification of people abetting circulation of counterfeit notes, banks
are advised to cover the banking hall / area and counters under CCTV
surveillance and recording and preserve the recording.
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 or circulation of High Quality
Counterfeit Indian 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 wilful 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, FIU-IND and National Crime Records Bureau 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/to (mail) 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
By All 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, by uploading the information on the FINnet Portal.
Similarly, data on FICN detection is also to be uploaded on the web-enabled
software of National Crime Records Bureau at their website.
A “nil “report may be sent in
case no counterfeit has been detected during the month.
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. Details of security features of the New Design banknotes of ?
2000 and ? 500 are available at the link paisaboltahai.rbi.org.in
Details of other banknotes are
also available under ‘Know your Banknotes’ at that link.
The Controlling Offices /
Training Centers should also organise / conduct training programmes 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
|
|
|
|
|
|
|
|
|
|
|
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
& address of the branch /currency chest where detection took place
|
Bank’s
Entry No.
|
|
|
|
|
|
|
3. The counterfeit notes are
enclosed.
4. Please acknowledge receipt.
Yours faithfully,
Authorised 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
|
|
|
|
|
|
|
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
Old
|
500
New
|
1000
|
2000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIR
|
|
|
|
|
|
|
|
|
|
|
Non-FIR
|
|
|
|
|
|
|
|
|
|
|
Pieces of notes processed
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
No. of pieces
|
|
|
|
|
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
|