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RBI to pay banks 25% in losses for fake notes

These instructions become effective from July 1, 2013

July 01, 2013 9:24 IST | India Infoline News Service
The Reserve Bank of India (RBI) will compensate banks 25% of the losses for reporting of counterfeit bank notes of Rs. 100 and above to it and other authorities.

"It has been decided to compensate the banks 25% of the loss incurred in respect of counterfeit notes of `100 and above detected by them and reported to RBI and Police authorities,” the RBI said in a notification on Saturday.

These instructions become effective from July 1, 2013, and the banks should commence reporting to RBI from August 2013, it added.

In order to detect counterfeit notes at bank or branch level itself before putting it into circulation, banks are required to process notes of Rs 100 and above denomination through machines as per the standards prescribed by the RBI.

According to RBI data, over 69.38 billion counterfeit notes were in circulation in 2011-12 and of these as many as 27.84 billion were of Rs 100 and higher denomination.

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