Detection and Impounding of Counterfeit
Notes
(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.
Detection of counterfeit notes
Ø Banknotes
tendered should be examined for authenticity through machines.
Ø No
credit to customer’s account is to be given for counterfeit notes.
Ø Counterfeit
notes should not be returned to the tenderer or destroyed.
Ø Failure
of the banks to impound counterfeit notes will be construed as willful
involvement of the bank concerned, in circulating counterfeit notes and penalty
will be imposed for violation.
Impounding of counterfeit notes
Notes determined as counterfeit
shall be stamped as "COUNTERFEIT NOTE" and impounded in the
prescribed format. Each such impounded note shall be recorded under
authentication, in a separate register.
Issue of Receipt to Tenderer
When a banknote is found to be
counterfeit, an acknowledgement receipt must be issued to the tenderer, after
stamping the note. The receipt, in running serial numbers, should be
authenticated by the cashier and tenderer. The receipt is to be issued even if
the tenderer is unwilling to countersign it. Notice to this effect should be
displayed at the branches.
For cases of detection of
counterfeit notes upto 4 pieces, in a single transaction, a consolidated report
should be sent by the Nodal Bank Officer to the police authorities or the Nodal
Police Station, along with the counterfeit notes, at the end of the month. For
5 or more pieces, in a single transaction, the counterfeit notes should be
forwarded for investigation by filing FIR.
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.
Acknowledgement of the police
authorities has to be obtained for the counterfeit notes submitted to them. In
case, any difficulty is faced due to reluctance of the police to receive the
statement or 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.
Banks are advised to cover the
banking hall / area and counters under CCTV surveillance and recording and
preserve the recording for future use in case of detection of counterfeit notes.
Banks should monitor the patterns
of such detection and suspicious trends should be brought to the notice of RBI
/Police authorities immediately.
The progress made by banks in
detection and reporting of counterfeit notes and problems thereof, should be
discussed in the meetings of various State Level Committees viz. SLBC, SCCM,
SLSC, etc.
The data on detection of
counterfeit Indian notes should be included in the monthly Returns forwarded to
RBI.
The definition of
'counterfeiting' in the Indian Penal Code covers foreign currency as well. In
case of suspected foreign currency note is 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.
Examination of the Banknotes before Issuing over
Counters, Feeding ATMs and Remitting to Issue Offices of the Reserve Bank
Banks should ensure that cash
receipts in the denominations of ₹ 100
and above are put into re-circulation only after being machine processed for
authenticity. Any non-compliance will be construed as violation.
It is imperative to put in place
adequate safeguards 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 in circulating Counterfeit Notes and may attract special
investigation by police authorities, and suspending the operation of the chest
concerned.
Penalty at 100% of the notional
value of counterfeit notes, in addition to the recovery of loss, 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 by RBI
The responsibility of ensuring
the quality and genuineness of cash loaded at White Label ATMs would be that of
the Sponsor Bank.
Designating Nodal Bank Officer
Each bank should designate Nodal
Bank Officer, district-wise and notify the same to RBI and Police Authorities.
All cases of reporting should be through such an Officer. He will also serve as
the contact point for all counterfeit note related activities.
Each bank shall establish at its
Head Office, a Forged Note Vigilance Cell to undertake the following functions:
i.
Dissemination, monitoring and
implementation of instructions issued by RBI. Compilation of data, and its
submission to RBI and FIU-IND. Follow-up of cases, with police authorities and
designated nodal officer.
ii.
Sharing of the information with bank’s
CVO and report all cases involving counterfeit notes.
iii.
Conducting periodic surprise checks at
currency chests where shortages/ defective /counterfeit notes etc. are
detected.
iv.
Ensuring operation of Note Sorting
Machines at the currency chests / back offices and monitoring the detection of
Counterfeit Notes and maintaining record. Ensuring that only sorted and machine
examined banknotes are fed into the ATMs / issued over the counters and to put
in place safeguards.
The Cell shall submit quarterly status
report covering the aforesaid aspects to RBI within a fortnight from the
conclusion of the quarter. The said report should only be sent by mail.
Banks shall furnish the
particulars of the Forged Note Vigilance Cells to RBI every year, as on 1st July by mail.
Provision of Ultraviolet Lamp and Other
Infrastructure
All bank branches including
currency chest and identified back offices should be equipped with ultra-violet
lamps, sorting and detection machines.
The banks shall maintain a daily record
of the notes processed through the Note Sorting machines and the counterfeits
detected.
The banks should consider
providing a counting machine (with dual display facility) for public use at the
counter.
By Bank branches
A statement showing the details
of counterfeit notes detected shall be compiled and forwarded RBI on a monthly
basis so as to reach them by 7th of the next month.
Principal Officers of banks are
also required to report transactions involving forged notes to The Director,
FIU-IND, Financial Intelligence Unit- India, within 7 working days.
A
“nil “report may be sent in case no counterfeit has been detected during the
month.
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 should be maintained by the concerned branch.
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. Such notes should be preserved for a period of three
years from the date of receipt.
These notes may thereafter be
sent to the concerned Issue Office of RBI.
Counterfeit notes, which are the
subject matter of litigation should be preserved with the concerned branch for 3
years after conclusion of the court case.
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.
The
design and security features of banknotes are to be displayed prominently at
the branches. Posters of the 2005-06 series of banknotes are also to be
displayed at branches. Details of security features of the New Design banknotes
of ₹ 2000 and ₹ 500 along with
other bank notes are available at the link http://www.paisaboltahai.rbi.org.in.
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.
Based
on RBI Master Circular Dated 20/07/2017. For further clarification please refer
www.rbi.org.in …….. Poppy
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