RBI Clean Note Policy, Detection of Counterfeit Notes & Note Refund Rules

RBI Clean Note Policy, Detection of Counterfeit Notes & Note Refund Rules 2018

1. RBI CLEAN NOTE POLICY,
DETECTION OF COUNTERFEIT NOTES,
& NOTE REFUND POLICY
(RBI/2018-19/3 DT. JULY 02, 2018)
[RBI (Note Refund) Amendment Rules, 2018]
Presented by,
Abinash Kr. Mandilwar
Chief Manager & Faculty Member
BOI, STC, Bhopal

2. BANK NOTES & COINS
➢AsperSec.22ofRBIAct,1934,RBIhassole
righttoissuebanknotes.
➢BankNotesshallbeissuedbyIssue
DepartmentofReserveBankofIndia.
➢Banknoteswillbelegaltenderandshallbe
GuaranteedbytheCentralGovernment.
➢RBIistheauthoritytoissuecurrencycalled
“BankNotes”.
➢Rs.1noteiscalled“currencynote”issuedby
CentralGovernmentandsignedbyFinance
Secretary.

3. BANK NOTES & COINS
➢NotescanbeissuedindenominationsofRs.2,5,
10,20,50,100,500,1000,5000,10000.orofsuch
otherdenominationalvalues,notexceedingten
thousandrupees.
➢CentralGovernmentmaydirectdiscontinuanceof
anydenominationnote.
➢PresentlyRBIissuednotesuptoRs.2000only.
➢Re.1/-notesissuedintermsofCurrencyOrdinance
1940.
➢CoinsareissuedintermsofIndianCoinageAct
1906.
➢CoinscanbeissueduptoRs.1000.
➢CoinstobeinvariablycirculatedthroughRBIonlyin
termsofSec38ofRBIAct.

4. 4 Presses 4
Mints
20 RBI Offices
4299 Cy Chests
Bank Branches
Public
Government
Departments
DISTRIBUTION OF NEW NOTES AND COINS
Mints atKolkata,
Mumbai, Noida &
Hyderabad
Presses atNasik,
Dewas, BRBNMPL
Mysore andSalboni
(03.02.1995)
20RBIOffices
There are 4299
currency chests &
4060SCDs

5. DISPOSAL OF OLD NOTES AND
WITHDRAWN COINS
Processed &
destroyed by
RBI
Public
Currency
Chests/
SCD
Bank
Branches
RBI Issue Offices
Govt Deptt
Withdrawn coins
are destroyed by
Mints
Soiled / unfit
notes sorted
& sent to
RBI

6. RBI’S DIRECTIVES UNDER
RBI CLEAN NOTE POLICY, 2001
❖Bankshouldnotstapleanynotepacketand
shouldusepaperbandstosecurenotepackets.
❖Notepacketsshouldbebandedwithpaper/
polymerbandswiththehelpofbandingmachines.
❖Bankshouldsortnotesintore-issuableandnon-
issuableandissueonlycleannotestopublic.
❖Soilednotesinunstapledconditionmaybe
tenderedatRBIthroughCurrencyChest.
❖Bankshouldstopwritingofanykindon
watermarkwindowofBankNotes.
❖ViolationofRBI’sdirectiveswillalsoattract
penaltyunderBankingRegulationsAct,1949.

7. RBI CLEAN NOTE POLICY, 2013
Alldealingofficersandstaffwereinstructedto
stopwritingofanythingonanypartofthe
BankNotetoensureachievementofthe
objectivesofCleanNotePolicy.
OBJECTIVES:
1.Themainobjectiveofthiscleannotepolicy
istoprovidegoodcurrencynotesandcoins
tothecitizenofourcountry.
2.Theobjectiveofthispolicyistoavoidthe
circulationofsoilednotesintheeconomy.

8. RBI CLEAN NOTE POLICY GUIDELINES
InadditiontoRBICleanNotePolicy2001guidelines,
bankshavetofollowsthegivenguidelines:
Banksareinstructedtoprovidecleancurrencyin
exchangeofsoilednoted.
RBIalsoprovidedtheguidelinesforcitizenofthe
countrywhichsaysthatavoidsoilingnotesbyoil,
wateretc.Donotwriteanythingonthecurrency
notes.
TheserulesareundertheSection35AofBanking
RegulationAct1949andiftheBankdoesnotfollow
thesethenthatbankmaybepunishableandthe
licenseofsuchbankcanbecancelled.

9. INITIATIVES TAKEN BY RBI UNDER
CLEAN NOTE POLICY
❖Tostopsuchsoiledcurrency,RBIdevelopedCurrency
VerificationAndProcessingSystem(CVPS)tospeedupthis
process.ThissystemisinstalledinthevariousofficesofRBI
whichhaveawatermarkfeatureinwhichthismachinerejects
thatnoteonwhichsomethingiswrittenonwatermark.
❖ThisCVPSmachinecaptureofprocessingabout50000–
60000piecesperhour.
❖Thismachinesortsthenoteswhichareingoodand/orbad
condition.Thebadconditionnotesaresegregatedandthe
noteswhichareingoodconditionarebandedintopackets
forre-issue.
❖RBIinstalled42suchmachinesinthecurrencyissueoffice.

10. CHALLENGES OF RBI CLEAN NOTE POLICY
StilltheRBI’sCleanNotePolicyremainsadream
because;
➢Somebranchesarenotacceptinglower
denominationnotes.
➢Afterthis,RBIfixedmonthlytargetfordistribution
ofcoinstothesecurrencychests.
➢RBIrequestedthebankstoopenonecurrency
chestbranchoneSundayinamonthatselected
centrestoprovidecurrencyexchangeand
distributionofsmallcoins.
➢ThechoiceofthecentreandthechoiceofSunday
shouldbelefttotheindividualbanktodecide.

11. FAKE INDIAN CURRENCY NOTE (FICN)
OR COUNTERFEIT CURRENCY NOTE
❖CounterfeitCurrencyNoteisahugeprobleminIndia,
❖FakeIndianCurrencyNote(FICN)isatermusedbyofficialsand
mediatorefertocounterfeitcurrencynotescirculatedinthe
Indianeconomy.
❖Althoughfakecurrencyisbeingprintedwithprecision,theCrime
InvestigationDepartment(CID)saysthattheycanbedetected
withsomeeffort.
❖Currencyprintedbylocalracketeersandforeignracketeersin
PakistanonthebehestofitsintelligenceserviceInter-Services
Intelligence(ISI)canbedetectedeasilyastheyusethe
photographicmethod,handengravedblocks,lithographic
processesandcomputercolourscanning.
❖Incounterfeitnotes,thewatermarkismadebyusingopaqueink,
paintingwithwhitesolution,stampingwithadyeengravedwith
thepictureofMahatmaGandhi.

12. SECURITY FEATURES
Salient features of the Rs.2000 Bank Note

13. SECURITY FEATURES
1.See-throughregister,withdenominationalnumeral
2000,canbeseenwhenyouholdthenoteagainstthe
light.
2.Latentimage,withdenominationalnumeral2000,
seenwhenyouholdthenoteat45degreeangleatthe
eyelevel.
3.Denominationalnumeral2000inDevnagariscript.
4.Asusual,thereisaPortraitofMahatmaGandhiinthe
centre.
5.Microletters‘RBI’and‘2000’.
6.Colour-shiftwindowed securitythreadwith
inscriptions‘भारत’,RBIand2000.Colourofthethread
changesfromgreentobluewhenyoutiltthenote.

14. SECURITY FEATURES
7.GuaranteeClause,Governor’ssignaturewithPromise
ClauseandRBIemblemtowardsright.
8.WatermarksofMahatmaGandhiportraitandelectrotype
(2000).
9.Numberpanel,withnumeralsgrowingfromsmalltobig
size,isprintedonthetopleftsideandbottomrightside.
10.DenominationalnumeralwithRupeeSymbol₹2000,in
colourchangingink(greentoblue).
11.TheAshokaPillarEmblemontherightsideofthenote.
12.Smallhorizontalrectanglewith₹2000inraisedprint,
abovetheAshokaPillarEmblem.
13.Sevenangularbleedlines,bothontheleftandrightside,
inraisedprint.

15. SECURITY FEATURES
Salient features on the Reverse of the
Rs.2000 Banknote

16. SECURITY FEATURES
14.Youwillfind'2016'astheYearof
Printingonthereverseofthenote.
15.SwachhBharatlogowithslogan,at
thebottomleft.
16.Thelanguagepanelistowardsthe
centre.
17.AlsoonthereverseistheMotifof
Mangalyaan,depictingIndia’sfirst
ventureintotheinterplanetaryspace.

17. SECURITY FEATURES
Salient features of Rs.500 Bank Note

18. SECURITY FEATURES
Salient features of Rs.500 Banknote
Exclusive for the Rs. 500 note:
Front side:
* Orientation and relative position of Mahatma
Gandhi portrait changed.
For visually impaired:
* Circle with denomination printed on it.
* Five bleed lines on left and right in raised
print.

19. SECURITY FEATURES
Salient features of Rs.200 Bank Note

20. SECURITY FEATURES
Salient features of Rs.200 Banknote
1. Fluorescent Ink Printing.
2. Optical Fibers Used.
3. Colour-shifting Windowed Security Feature.
4. Raised printing of MahatamaGandhi visual
along with the emblem of AshokaPillar.
5. Light & Shade Effect –electrotype watermark
and Mahatma Gandhi visual.
6. Floral Design.
7. DevnagariScript.

21. SECURITY FEATURES
Salient features of Rs.200 Banknote Obverse (Front)
1.Seethroughregisterwithdenominationalnumeral200.
2.Latentimagewithdenominationalnumeral200.
3.Denominationalnumeral२००inDevnagari.
4.PortraitofMahatmaGandhiatthecentre.
5.Microletters‘RBI’,‘भारत’,‘India’and‘200’.
6.Windowedsecuritythreadwithinscriptions‘भारत’and
RBIwithcolourshift.Colourofthethreadchangesfrom
greentobluewhenthenoteistilted.
7.GuaranteeClause,Governor’ssignaturewithPromise
ClauseandRBIemblemtowardsrightofMahatmaGandhi
portrait.

22. SECURITY FEATURES
Salient features of Rs.200 Banknote Obverse (Front)
8.DenominationalnumeralwithRupeeSymbol,₹200in
colourchangingink(greentoblue)onbottomright.
9.AshokaPillaremblemontheright.
10.MahatmaGandhiportraitandelectrotype(200)
watermarks.
11.Numberpanelwithnumeralsgrowingfromsmalltobigon
thetopleftsideandbottomrightside.
12.Forvisuallyimpaired
IntaglioorraisedprintingofMahatmaGandhiportrait,Ashoka
Pillaremblem,raisedIdentificationmarkHwithmicro-text₹
200,fourangularbleedlineswithtwocirclesinbetweenthe
linesbothontherightandleftsides.

23. SECURITY FEATURES
Salient features of Rs.200 Bank Note Reverse (Back)
13.Yearofprintingofthenoteontheleft.
14.SwachhBharatlogowithslogan.
15.Languagepanel.
16.MotifofSanchiStupa.
17.Denominationalnumeral२००in
Devnagari.
18.Dimensionofthebanknotewillbe66
mm×146mm.

24. SECURITY FEATURES OF RS.100 NOTE

25. SECURITY FEATURES OF RS.100 NOTE (FRONT)
1.See-throughregisterwithdenominational
numeral100;
2.Latentimagewithdenominationalnumeral100;
3.Denominationalnumeral100inDevanagari;
4.PortraitofMahatmaGandhiatthecentre;
5.Microletters‘RBI’,‘Bharat’(inDevanagari),‘India’
and‘100’;
6.Windowed securitythreadwithinscriptions
‘Bharat’(inDevnagari)andRBIwithcolourshift.
Colourofthethreadchangesfromgreentoblue
whenthenoteistilted.
7.

26. SECURITY FEATURES OF RS.100 NOTE (FRONT)
7.GuaranteeClause,Governor’ssignaturewith
PromiseClauseandRBIemblemtowardstherightof
MahatmaGandhiportrait;
8.AshokaPillaremblemontheright;
9.MahatmaGandhiportraitandelectrotype(100)
watermarks;
10.Numberpanelwithnumeralsinascendingfonton
thetopleftsideandbottomrightside;
11.Forvisuallyimpairedintaglioorraisedprintingof
MahatmaGandhiportrait,AshokaPillaremblem
raisedtriangularidentificationmarkwithmicro-text
100,fourangularbleedlinesbothontherightand
leftsides.

27. SECURITY FEATURES OF RS.100 NOTE (BACK)
12. Year of printing of the note on the left;
13. Swachh Bharat logo with the slogan;
14. Language panel;
15. Motif of RANI KI VAV;
16. Denominational numeral 100 in Devnagari;
In2014,UNESCOhadrecognisedGujarat’s‘Rani-ki-Vav’,
the11
th
centurywonderinPatan,asaWorldHeritage
Site.ItwillmakeagranddebutonthisnewRs.100
note.
The200-rupeenotewithabasecolourofbrightyellow
bearsthemotifofSanchiStupa.Thechocolatebrown
Rs.10notehasKonarkSunTempleonthereverseside.
ThefluorescentblueRs.50notesfeaturesStoneChariot
inHampi,anotherworldheritagesiterecognisedby
UNESCO.

28. COUNTERFEIT CURRENCY REPORT(CCR)
➢CCR(counterfeitcurrencyreport)tobe
submittedwithin7workingdaysfrom
thedateofoccurrenceoftransaction
(ProcesssameasSTR).BranchtoZO2
days.Upto4piecesFIRneednotbe
filed.Insteadaconsolidatedmonthly
statementissendtopolicewith
counterfeitcurrentnotes.
➢For5piecesandaboveFIRhastobe
filed.
28

29. FACILITY FOR EXCHANGE OF NOTES & COINS
(RBI/2018-19/3 DT. JULY 02, 2018)
Allbranchesofbanksinallpartsofthecountryaremandatedto
providethefollowingcustomerservices,moreactivelyand
vigorouslytothemembersofpublicsothatthereisnoneedfor
themtoapproachtheRBIRegionalOfficesforthispurpose:
(i)Issuingfresh/goodqualitynotesandcoinsofall
denominationsondemand,
(ii)Exchangingsoiled/mutilated/defectivenotes,and
(iii)Acceptingcoinsandnoteseitherfortransactionsorexchange.
Itwillbepreferabletoacceptcoins,particularly,inthe
denominationsof₹1and2,byweighment.
However,acceptingcoinspackedinpolythenesachetsof100each
wouldperhapsbemoreconvenientforthecashiersaswellasthe
customers.Suchpolythenesachetsmaybekeptatthecounters
andmadeavailabletothecustomers.

30. EXCHANGE OF SOILED NOTES
Notespresentedinsmallnumber:Wherethenumberof
notespresentedbyapersonisupto20pieceswitha
maximumvalueof₹5000perday,banksshouldexchange
themoverthecounter,freeofcharge.
Notespresentedinbulk:Wherethenumberofnotes
presentedbyapersonexceeds20piecesor₹5000in
valueperday,banksmayacceptthem,againstreceipt,for
valuetobecreditedlater.Banksmaylevyservicecharges
aspermittedinMasterCircularonCustomerServicein
Banks(DBR.No.Leg.BC.21/09.07.006/2015-16datedJuly1,
2015).
Incasetenderedvalueisabove₹50000,banksare
expectedtotaketheusualprecautions.

31. RBI (NOTE REFUND) RULES, 2009
(RBI CIRCULAR DT. Sep 25, 2018)
❖TheReserveBankhasbeenextendingfacilities
tothepublicforexchangingcutandmutilated
notesatallitsIssueOfficesandcurrency
chestbranchesofcommercialbanks.
❖InordertomaketheNoteRefundRuleseasyto
understandandtoapply,thesehavebeen
comprehensivelyrevisedandsimplified.
❖TheserulesmaybecalledtheReserveBankof
India(NoteRefund)Rules,2009andfurther
amendedvideReserveBankofIndia(Note
Refund)AmendmentRules,2018.

32. GENERAL PROVISIONS IN
RELATION TO ALL CLAIMS
(1)Noclaiminrespectofanote,whichisallegedtohave
beenstolen,lostorwhollydestroyed,shallbe
entertained.
(2)IfthePrescribedOfficerissatisfiedthatamutilated
notepresentedbeforehimisonewhichappearstohave
beencancelledatanyofficeofthebankortheclaimis
onewhichappearstohavealreadybeenpaidunder
theserules,hemay,aftermakingenquiriesunderrule5
aboverejecttheclaimonsuchnote.
(3)Aclaiminrespectofanote,which:-
i)cannotbeidentifiedwithcertaintyasagenuinenotefor
whichthebankisliableundertheAct;

33. NOTEREFUNDRULES
ii)hasbeenmadeimperfectormutilated,thereby
causingthenotetoappeartobeofahigher
denomination,orhasbeendeliberatelycut,torn,
defaced,alteredordealtwithinanyothermanner,not
necessarilybytheclaimants,enablingtheuseofthe
sameformakingofafalseclaimundertheserulesor
otherwisetodefraudtheBankorthepublic,
iii)carriesanyextrinsicwordsorvisiblerepresentations
intendedtoconveyorcapableofconveyingany
messageofapoliticalorreligiouscharacterorfurthering
theinterestofanypersonorentity;
iv)hasbeenimportedintoIndiabytheclaimantfromany
placeoutsideIndiaincontraventionoftheprovisionof
anylaw;

34. IMPERFECT NOTE
Thevalueofanimperfectnotemaybe
paidforfullvalue/halfvalueasspecified
inthetablesgiveninruleMutilated
notes,if-,
a)thematter,whichisprintedonthenote
hasnotbecometotallyillegible,and
b)thePrescribedOfficerissatisfied,
havingregardtotheprintedmatter
whichislegibleonthenote,thatitisa
genuinenote.

35. MUTILATED NOTES
(1)Theadjudicationofclaimsinrespectofnotesofless
thanfiftyrupeesdenominationshallbemadeinthe
followingmanner,namely,
(i)Iftheareaofthesinglelargestundividedpieceof
thenotepresentedismorethan50percentofthe
areaoftherespectivedenomination,roundedoffto
thenextcompletesquarecentimeter,fullvalueon
mutilatednotesoftheabovedenominationsshallbe
payable;
(ii)Iftheareaofthelargestundividedpieceofthenote
presentedislessthanorequalto50percentofthe
areaofthenote,theclaimshallberejected.

36. Example: Full Value Notes

37. Example: No Value Notes

38. NOTE REFUND RULES
For the purposes of this sub-rule, it is hereby clarified that the value
of a mutilated note of less than rupees fifty denomination may be
refunded in full if the undivided area of the single largest piece of
the note is as specified in column of the Table below.
Denomination Length
(centimetre)
Width
(centimetre)
Area
(incentimetre
2
)
Minimumarea
(in centimetre
2
)
required for
payment*
1 9.7 6.3 61 31
2 10.7 6.3 67 34
5 11.7 6.3 74 38
10 13.7 6.3 86 44
10(NewMGSeries)12.3 6.3 77.49 39
20 14.7 6.3 93 47
20(NewMGSeries)12.9 6.3 81.27 41
*Indicatedasthenextcompletehighersquarecentimeterafterhalfofthe
areaofthenotesinaparticulardenomination.

39. NOTE REFUND RULES
(2)Thepaymentofclaiminrespectofnoteofrupeesfifty
andabovedenominationsshallbemadeinthefollowing
manner,namely-,
(i)Fullvalueofthemutilatednotesoftheabove
denominationsshallbepayableiftheareaofthesingle
largestundividedpieceofthenotepresentedismore
than80percentoftheareaoftherespective
denominationroundedofftothenextcompletesquare
centimeter;
(ii)Iftheundividedareaofthesinglelargestundividedpiece
ofthenotepresentedisequaltoormorethan40percent
andlessthanorequalto80percentoftheareaofthe
respectivedenominationroundedofftothenext
completesquarecentimeter,halfthevalueofthenoteis
payable.

40. NOTE REFUND RULES
(iii)Iftheareaofthesinglelargestundivided
pieceofthenoteislessthan40percent,no
valueshallbepayable,andtheclaimshallbe
rejected.
(iv)Iftheclaimofmutilatednotesofrupees
fiftyandabovedenominationsconsistofanote
composedoftwopiecesofthesamenoteand
thetwopieces,individuallyhaveanareaequal
toormorethan40percentofthetotalareaof
thenoteinthatdenomination,thentheclaim
mayberefundedforfullvalueofthenote.

41. NOTE REFUND RULES
Forthepurposesofthissub-rule,itisherebyclarifiedthatthe
valueofamutilatednoteofequaltoormorethanrupeesfifty
denominationmayberefundedinfullorhalf,asthecasemaybe,if
theminimumundividedareaofthesinglelargestpieceofthenote
isasspecifiedincolumn(5)or(6)oftheTablebelow.
Denomination Length
(cm)
Width
(cm)
Area(in
cm
2
)
Minimumarea(incm
2
)
requiredforpaymentof
fullvalue@
Minimumarea(incm
2
)
requiredforpayment
ofhalfvalue**
50 14.7 7.3 107 70 43
50(NewMGSeries)13.5 6.6 89.10 72 36
100 15.7 7.3 115 75 46
100(NewMGSeries)14.2 6.6 93.72 75 38
200 14.6 6.6 96.36 78 39
500 16.7 7.3 122 80 49
2000 16.6 6.6 109.5688 44
@Roundedofftothenextcompletehighersquarecentimeterof80%oftheareaofthenotes
inaparticulardenomination.
**Roundedofftothenextcompletehighersquarecentimeterof40%oftheareaofthenotes
inaparticulardenomination.

42. PAYMENT OF CLAIM IN RESPECT OF
MISMATCHED NOTE
Thepaymentofclaiminrespectofamismatchednote
maybedealtwithasfollows,namely-,
(a)incaseofnotesuptorupeestwentydenomination
notes,theareaofthelargerofthetwopiecespresented
maybemeasuredandadjudicatedaspertheprovisionsof
sub-rule(1)ofRule8,ignoringthesmallerhalf.
(b)ifnoneofthetwopiecespresentedmeetstheminimum
areastipulatedaspertheprovisionsofclause(i)ofsub-
rule1ofrule8above,theclaimshallberejected.
(c)incaseofrupeesfiftyandabovedenominations,the
twopiecesmaybetreatedastwoseparateclaimsand
dealtwithaccordingly.