The Reserve Bank of India (RBI) on Friday revised the existing guidelines for authentication and sorting the new series of banknotes and issued guidelines directing banks to test their banknote sorting machines on a quarterly basis.
“In the backdrop of introduction of the new series banknotes, these parameters have been reviewed and a revised set of guidelines are enclosed for implementation,” the central bank said.
A fit note is a note that is genuine, sufficiently clean to allow its denomination to be readily ascertained and thus suitable for recycling. An unfit note is a note that is not suitable for recycling because of its physical condition or belongs to a series that has been phased out by the Reserve Bank of India from time to time. The sorting machines used by banks shall sort all the phased-out notes as unfit, irrespective of their physical condition.
The unfit Bank Notes like soiled notes, limpness, dog-ears, notes with tears, holes, stains, Graffiti, crumples/folds, decoluration, repair, mutilated, imperfect, mismatched notes and built-up notes have been phased out by the Reserve Bank of India from time to time. As per the direction of the RBI, the sorting machines used by banks shall sort all the phased-out notes as unfit, irrespective of their physical condition.
The machines shall also perform authenticity checks with reference to the features of genuine notes as disclosed by the Reserve Bank of India from time to time on its website. Any note which is not found to be having all the features of a genuine note shall be classified by the machine as suspect/reject.
Fit for recycling:
The following fitness parameters laid down by the Apex Bank for bank notes should be individually evaluated on all parameters to be considered fit for recycling.
According to the RBI guidelines, soiling refers to the general distribution of dirt across the entire note or in some patterns. It is a measure of the loss of reflectivity from the unprinted areas due to dirt, ageing (yellowing), wear and extraneous markings and includes decolouration due to ageing, excessive folding and other wearing. While evaluating for soiling, both the obverse and the reverse of the note shall be checked and notes exceeding the soiling level specified by RBI shall be sorted out as unfit.
Limpness relates to structural deterioration or wear resulting in a marked lack of stiffness in the note paper. Notes with very low stiffness of paper, i.e. with paper which is worn out in circulation or mechanically mutilated shall be sorted as unfit. Detectors for paper quality shall be adapted to the same level as for soiling.
Banknotes with dog ears with an area of more than 100 mm² and a minimum length of the smaller edge greater than 5 mm shall be sorted as unfit. Chipped notes shall also be sorted as unfit.
Notes exhibiting at least one tear at the edge shall be classified as those having tears Notes with tears larger than those indicated below shall be sorted as unfit.
Vertical tear: 4mm width and 8mm length
Horizontal tear: 4mm width and 15mm length
Diagonal tear*: 4mm width and 18mm length
* Measured by drawing a straight line from the peak of the tear to the edge of the note where the tear begins (rectangular projection), rather than measuring the length of the tear itself.
Holed notes refer to notes with at least one visible hole. Notes with holes with an area exceeding 8 mm² shall be sorted as unfit.
The visible markings which are not part of the feature of a note are known as stained notes. Such notes shall be detected as unfit if localized – i.e. with limited extension – stain can be recognised on its surface. In case the total area covered by stains exceeds 500 mm², the note shall be sorted as unfit. A note with a single stain covering an area of more than 200 mm² shall be sorted as unfit. Both the obverse and the reverse of the note shall be checked for stains.
Graffiti refers to the deliberate graphic alteration of the note with, for example, figures or letters. The same yardstick used for stains should be used to ascertain fitness criteria in the case of graffiti. Both the obverse and the reverse of the note shall be checked for graffiti.
Crumpled/folded notes shall be sorted as unfit if the folds result in a reduction of the original note in length or width greater than 5 mm.
Notes affected by decolouration shall be sorted as unfit if the ink is partially or wholly missing from its surface. Both the obverse and the reverse of the note shall be checked for decolouration.
A repaired note is created by joining parts of the same note together, for example, by using extraneous matter such as tape, paper or glue. Notes with the following types of repairs shall be sorted as suspect/reject:
- Repairs covering an area greater than 100 mm²; or
- Thickness of the extraneous matter 50 mm or more; or
- Width of the extraneous matter 10 mm or more; or
- Length of the extraneous matter 10 mm or more.
Mutilated, Imperfect, Mismatched Notes and Built-up Notes:
The Mutilated, Imperfect, Mismatched Notes and Built-up Notes shall be classified as suspect/reject as defined by RBI in NRR 2009 (amended in December 2018). , Suspect/Reject notes shall also be subjected to Manual Inspection for any wrongdoings
Banks will have to prepare a test deck of a minimum of 2,000 pieces of soiled notes, including mutilated ones and fake Indian currency notes, as per the revised guidelines. The machine will be required to be tested by using notes of different denominations such as Rs 100 old series notes, Rs 100 new series notes, Rs 200 notes, Rs 500 notes and Rs 2,000 notes. In case of discrepancies during the sorting, suppliers will have to re-calibrate the machines, 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 terms, the share of Rs 500 and Rs 2000 banknotes together accounted for 87.1% of banknotes in circulation. In volume terms, Rs 500 denomination constituted the highest share at 34.9% of the total banknotes in circulation.