Though there are few cases of counterfeit notes finding their way into ATMs, many are hesitating to lodge a formal complaint as the hope of getting the fake note replaced is bleak. In some cases, the bank concerned disowns responsibility, as the customer will have no evidence to substantiate his claim.

To cap it all, in most cases, a person will have shock of his life when he comes to know that it is a counterfeit note after it gets rejected at a shop or a hotel.

Enquiries have revealed that despite specific instructions from the RBI, some banks, due to outsourcing and shortage of manpower, are not ensuring that all notes issued by them for loading into ATMs are authentic. They resort to random tests on the cash sorting machines, apparently due to paucity of time and manpower crunch.

“We do also accept a few fake notes at our teller counters due to oversight. We either ask a businessman to take it and recirculate, or replace it,” admits a bank employee seeking anonymity.

The process

Asked to comment what a person was supposed to do in case he drew a counterfeit note from an ATM, Banking Ombudsman M. Sebastian told The Hindu that “such things should not happen.” The customer, he said, should lodge a police complaint, take up the issue with the bank concerned, and write a letter to the Issue Department of the RBI for appropriate action.

“We do have checks and controls and validation system to be followed by all the banks before loading cash into ATMs,” he clarified. As per internationally-accepted practices, the banks are supposed to put pre-stuffed and sealed cassettes for insertion into the vaults of ATMs. “The machines should be equipped with a system to validate the notes and sound an alarm if a note is not genuine,” Commissioner of Police J. Poornachandra Rao said.

‘Onus on banks’

He said the onus of filling the ATMs with genuine notes lay with the banks. “Each note has a unique number. They should note down the numbers or give a declaration with proper checks that all notes are genuine,” Mr. Rao opined.

More In: Visakhapatnam