RBI revises banknote authentication and sorting standards

The Reserve Bank of India (RBI) issued guidelines on Friday asking banks to test their banknote sorting machines on a quarterly basis. The central bank has revised the existing authentication and sorting guidelines following the introduction of the new banknote series.

“In the context of the introduction of the new series banknotes, these parameters have been reviewed and a revised set of guidelines are attached for implementation,” the central bank said.

Currently, the RBI issues banknotes in denominations of Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500 and Rs 2000, according to information in its annual report for 2021-22. In value, the share of Rs 500 and Rs 2000 notes together accounted for 87.1% of notes in circulation. In terms of volume, the Rs 500 denomination constituted the highest share with 34.9% of the total banknotes in circulation as of March 31.

Banks will have to prepare a test set of at least 2,000 soiled notes, including a mutilated note and counterfeit Indian notes, under the revised guidelines. The machine will need to be tested using banknotes of different denominations such as old series Rs 100 banknotes, new series Rs 100 banknotes, Rs 200 banknotes, Rs 500 banknotes and Rs 2,000 banknotes. In the event of discrepancies during sorting, suppliers will have to recalibrate the machines, the central bank said.

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