BIS Mandates New Standard for Note Sorting Machines to Curb Fake Currency

The Bureau of Indian Standards (BIS), in collaboration with the Reserve Bank of India (RBI), has introduced a new Indian Standard for Note Sorting Machines to combat the circulation of counterfeit currency. The standard, designated as IS 18663:2024, sets minimum functional performance and safety benchmarks for machines used to process, authenticate, and sort cash.

According to the RBI's annual report, Rs 500 notes account for 85.5% of currency in circulation and also constitute the majority of counterfeit notes detected. In the last financial year, more than 2.29 lakh fake currency notes were detected, with approximately 95% of these cases originating from non-RBI banks or non-banking financial companies.

“More than 2.29 lakh fake currency was detected in the just concluded financial year, and approximately 95 per cent of this was from non-RBI banks or Non Banking Financial Company,” said Sailendra Kumar Verma, Scientist-C/Deputy Director at the BIS Ghaziabad Branch Office, explaining the need for the standard.

The new standard, IS 18663:2024, requires note sorting machines to automatically classify individual banknotes and segregate them into distinct categories without manual intervention. Financial institutions feeding notes into the machine must ensure authentication based on RBI criteria, after which the machine checks for fitness.

The Central Laboratory of BIS in Sahibabad is the only authorised lab for performance testing of note sorting machines, as recognised by the RBI. Testing covers two parameters: performance and safety.

G. Bhavani, Scientist-F, Senior Director and Head of the BIS Ghaziabad Branch Office, stated that five domestic and four international manufacturers have already obtained licences to produce these machines. “All these years, we did not have a machine made in India, so to check counterfeit currency RBI came up with this mandate. BIS certification is mandatory for any Note Sorting Machine deployed by Indian banks from May 1, 2025,” Bhavani said.

The move aims to bring uniformity and safety into currency transactions, ensuring that only authentic and fit notes remain in circulation.