Note Refund Rules

And
Detection and
impounding of
counterfeit notes
OVERVIEW OF CURRENCY MANAGEMENT
• Currency

• Currency Management

• Organisational Set up

• Printing Presses: Nasik and Dewas , Mysore and Salboni

• Commemorative coins

• Mints: Mumbai, Hyderabad, Calcutta and Noida

• Chandigarh Issue Circle

Exchange Of Notes And Coins At Bank
Branches
For the benefit and convenience of public, all branches of banks are
mandated to provide the following customer services on all working
days:
(i) Issuing fresh/ good quality notes and coins of all denominations,
(ii) Exchanging soiled / mutilated / defective notes,
(iii) Accepting coins and notes either for transactions or exchange.
 Difference between Soiled & Mutilated Note?

• Soiled Note: a note which has become dirty due to excess usage & also includes a
two-piece note pasted together wherein both pieces presented belong to the same
note & form the entire note.
 Soiled Notes
• Notes cut in two pieces with both the parts intact are to be treated as soiled notes
and exchanged accordingly
 Mutilated Note
• a note of which a portion is missing or is composed of more than two pieces.
For adjudication, focus on the single largest undivided portion of the note.
Process of Adjudication
• Prescribing officer
• What all is needed ?
• UV Lamp
• White Light
• Adjudication Scale
• FV/HV/Reject Stamp
Process of Adjudication - LDN
More than 50% of the area is Full Value otherwise Reject
(rounded off to the next complete square centime )
 Length Width (cm) Area (in Minimum area
Denomination (cm) centimetre 2) (in centimetre 2)
required for
payment*
1 9.7 6.3 61.11 31
2 10.7 6.3 67.41 34
5 11.7 6.3 73.71 37
10 13.7 6.3 86.31 44
10(NewMGSeries) 12.3 6.3 77.49 39
20 14.7 6.3 92.61 47
20(NewMGSeries) 12.9 6.3 81.27 41
Process of Adjudication – Higher Denomination Rs
50/- and above

Area of single largest undivided piece* :-

-More than 80% - FV

-Between 40% - 80% - Half Value

-Less than 40% - Reject

*rounded off to the next complete square

centime
 Lengt Width Area Min area (in Min area (in
Denomi h (cm) (cm) (in cm2) cm2) required cm2) required
nation for payment of for payment of
full value half value
50 14.7 7.3 107 86 43
50(NewM 13.5 6.6 89.10 72 36
GSeries)

100 15.7 7.3 114.61 92 46

100(New 14.2 6.6 93.72 75 38
MGSeries)

200 14.6 6.6 96.36 78 39

500 15.0 6.6 99.00 80 40
2000 16.6 6.6 109.56 88 44
 Length Width Area Min area (in Min area (in
Denomi (cm) (cm) (in cm2) cm2) required cm2) required
nation for payment of for payment of
full value half value
50 14.7 7.3 107 86 43

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
 Length (cm) Width (cm) Area (in Minimum area Minimum area
Denomi cm2) (in cm2) (in cm2)
nation required for required for
payment of full payment of
value half value

100 15.7 7.3 114.61 92 46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Illustrations

✓ The note is a two piece note

✓ Both the pieces form the entire note.
✓ Note will be treated as a SOILED NOTE.
✓ Full value of the note will be paid.
✓ Portion of the note is missing , mutilated note
✓ The available portion of the note is more than
50%
✓ Full value of the note will be paid.
✓ The note is a MUTILATED note
✓ Note is in more than two parts
✓ Some portion is missing.
✓ The single largest piece is more than 50%
✓ Full value of the note will be paid.
✓ Three pieces note
✓ Single largest piece is less than 50%.
✓ The note will be treated as a REJECTED.
✓ The note is torn into two pieces.
✓ Two pieces together form the entire note.
✓ Adjudication of notes is not required.
✓ Treated will be “Soiled Note”.
✓ The note is full value note.
✓ The note is a mutilated note
✓ A portion of the note is missing.
✓ Available part is in a single piece
✓ The area is more than 40%
✓ Less than 80 % of an entire note,
✓ Note is half value note
✓ The note has multi pieces
✓ None of the pieces is equal to or more than 40%
✓ None of the pieces qualifies for any exchange value.
✓ The exchange value will be “Nil”.
✓ The note will be treated as a REJECTED.
✓ This note is a mutilated note
✓ Number panel is missing
✓ The available part is in a single piece
✓ Note is intacted
✓ The area is more than 80% of an entire note,
✓ Note is full value note.
 Mismatched Note
• A note which has been formed by joining a half note of any one note to a half note
of another note.
 Notes of ₹ 1 to ₹ 20
• If area of any piece is more than 50% of area of respective denomination - full value
• If none of the two pieces more than 50% - reject
Notes of ₹ 50 & above
• the two pieces may be treated as two separate claims & dealt with accordingly.
Illustrations

✓ Note is a mismatch note

✓ Half note is of Rs 10 and Half note is of Rs 20.
✓ Area of larger of two pieces will be measured and adjudicated.
✓ Each note is equal to 50% of the area of the respective note.
✓ Here none of the pieces meet criteria. Both the halves will be
rejected.
✓ Area needs more than 50%
✓ Note is a mismatch note
✓ Rs 20 note is more than 50%
✓ Rs 10 is less is less than 50%.
✓ Claim of Rs 20 will be paid full.
✓ The note is a mismatch note
✓ Each part of the notes should be adjudicated separately.
✓ If both the pieces of both notes are more than 40% of the
area of their respective notes
✓ Both are payable for half value of their respective notes.
Procedure for exchange of soiled notes
Soiled note

Up to 20 pieces, max value More than 20 pieces or exceeds

Above 50,000/-
5000/- 5000/-

Accept notes over receipt – credit

Exchange over counter- same day later – may levy service charge as
Take necessary precautions
credit – free of charge per master circular on cust
service
Procedure for exchange of mutilated notes- non
CC branch
Mutilated notes

Small numbers Bulk

More than 5 pieces, not Exceeding Rs.5000 in

Upto 5 pieces
exceeding 5000/- value

If cant adjudicate send Advise to send to CC

Adjudicate and pay Advise to go to nearest
to nearest linked CC branch via insured post
over counter same day CC branch in person
branch or in person

Credit customer within CC branch should

30 days credit within 30 days
Procedure and Reporting

• DN 1 – To the customer
• DN 2 – Register
• DN 3 – Rejection Advise
• Full value notes are to be packed separately when sent
along with soiled note remittance
• Should be shown as paid notes in e-Kuber
• HV and Reject should not be shown as part of CC balance .
• HV and Reject notes should be sent directly to Claims Section of
RBI (having completed preservation period of 3 months)
Disposal of Notes FV
• The FV paid notes may be treated on par with soiled notes and
shall be kept as part of currency chest balance.
• These notes should be shown in chest slip as non-issuable
notes.
• Pack these notes separately and send along with soiled notes
to RBI
• All chest branches should send monthly statement of
adjudicated notes to RBI.
Disposal of Notes HV
• The HV notes and rejected notes shall be kept separately
along with the cash balance of the branch.
• In no case they shall be kept deposited with the FV paid notes
in the chest along with Chest balance.
• These notes may be sent separately to Claims Section, ID, RBI
 Display of Notice Board

"SOILED/MUTILATED NOTES AND COINS ARE

ACCEPTED AND EXCHANGED HERE".

#Penalty for denial of services is Rs 10,000 /- in the

first instance. More than 5 instances of violation
attracts a penalty of Rs 5 lakh.
 Sample -1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Sample -2
Sample -3
Sample -4
Sample - 5
Sample - 6
Process of Adjudication
• Notes which should be Rejected :-
• If genuineness of the note cannot be identified.
• If the note has been deliberately cut or tampered with
• If slogans and messages of political and religious nature
are written on the note.
Extremely Brittle, Burnt, Charred, Stuck Up Notes?

• cannot withstand normal handling due to above, Shall not

be accepted by the bank branches for exchange.
• Special Procedure at Reserve Bank of India
Special Procedure Examples
FICN

• How to detect ?
• Procedure to be followed when detected and
reporting requirements as per Master Circular on
Detection and Impounding of Counterfeit Notes , April
2022
 Definitions
Security Features –features necessary for deciding the genuineness of
the note
• watermark – light and shade effect and multi-directional lines
• intaglio printing
• security thread - Colour shifting with “Bharat” “RBI” & denomination
written
• micro lettering
• Optically Variable Ink – green when held flat and blue at an angle
• latent image – visible only when the note is held horizontally at eye
level
• Bleed lines – notes issued after 2016 – number & blocks vary as per
denomination
• Ascending font of numbers – Ballooning effect
 Major Security features in bank notes
Windowed
Watermark Security Latent Image
Thread

Optically Intaglio Micro

Variable Ink Printing lettering

See-through Ascending Identification

Register Fonts Mark

Bleed Lines
How to detect FICN ?

2000 R
B

2000
2K I
How to detect FICN ?
• Touch and feel of the note – made from a special watermarked paper
made from cotton .
1. Security Thread
4. Micro lettering

2. Watermark

3. Latent Image
How to detect FICN ?
• Touch and feel of the note – made from a special watermarked paper
made from cotton . 9. Fluorescence under UV
1. Security Thread
4. Micro lettering

2. Watermark

5. Ascending Font of numbers

6. Bleed Lines

7. See through register 8. Colour shifting ink

3. Latent Image
How to detect FICN ?
• Touch and feel of the note – made from a special watermarked paper
made from cotton . 9. Fluorescence under UV
1. Security Thread
4. Micro lettering

2. Watermark

5. Ascending Font of numbers

6. Bleed Lines

7. See through register 8. Colour shifting ink

3. Latent Image
Procedure to be followed on Detection
• Notes determined Counterfeit shall stamped as “COUNTERFEIT
BANKNOTE’’. For this a uniform stamp of size 5cm * 5cm may be used.
COUNTERFEIT BANKNOTE
IMPOUNDED

BANK

BRANCH / CURRENCY CHEST

NAME OF THE BANK

SIGNATURE

DATE
Procedure to be followed on Detection
• An acknowledgement receipt in the prescribed format must be issued to
the tenderer, after stamping the note.
Procedure to be followed on Detection and
Reporting
• Reporting to Police : If 5 or more than 5 pieces of notes are
detected in a single transaction the Counterfeit Notes should
be forwarded immediately by the Nodal Bank Officer to the
local police authorities for investigation by filing FIR.
Procedure to be followed on Detection and
Reporting
• Up to 4 pieces - a consolidated report should be sent by
Nodal Bank Officer to the police authorities or the Nodal
Police Station, along with the suspect Counterfeit Notes, at the
end of the month
Procedure to be followed on Detection and
Reporting
• Reporting data to RBI/NCRB and FIU – Ind
• Consolidated report in prescribed format (FNV statement)
before 7th - RBI
• FIU-IND portal data should be uploaded by 15th of the next
month.
Proper sorting should be ensured
• Denominations of ₹100 and above are not to put into re-
circulation without the notes being machine processed for
authenticity.
• Penalty – 100% of the notional value of the note for FICN
found in soiled note remittance.
Preservation of Notes
• All Counterfeit Notes received back from the police
authorities / courts (after conclusion of court case) may be
carefully preserved for a period of 3 years from the date of
receipt from the police authorities.
• After the preservation period, such notes may be sent to the
Issue Office of Reserve Bank of India concerned with full
details.
Thank you ☺

Nisha Thakur
Asstt. General Manager
Reserve Bank of India