The digital world is increasingly up against the counterfeit. ‘Fake news’ is ubiquitous. AI-generated images and voices add a deadly dimension to it, making it challenging to sift reality from a malicious representation of it. But the world has always been threatened by the counterfeit, having had to battle various forms of it offline, one of it being counterfeit currency or fake currency.

Did you know that in terms of circulation, Rs. 500 rules the roost, and that this denomination accounts for the maximum number of fake currencies? According to Reserve Bank of India’s annual report, 85.5% of the share of currency in circulation is ruled by ₹500 notes which also accounts for the maximum fake currency.

To combat the circulation of fake currencies and also bring uniformity and safety into currency transactions, the Bureau of Indian Standards (BIS), in collaboration with the RBI, has introduced IS 18663:2024, an Indian Standard for Note Sorting Machines.

“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,” says Sailendra Kumar Verma, Scientist-C/ Deputy Director, Ghaziabad Branch Office of BIS, explaining the situation that necessitated this move.

What does the standard do?

IS 18663:2024 lays down the minimum functional performance and safety benchmarks for machines used to process, authenticate and sort cash. These advanced machines are designed to automatically classify individual banknotes and segregate them into distinct categories without any manual intervention.

So whenever a financial institution feeds notes into the machine, it authenticates based on the criteria given by RBI. Once it passes this test it goes to the fitness criteria.

The Central Laboratory of BIS, located in Sahibabad, is said to be the only authorised lab for performance testing of Note Sorting Machines, as recognised by RBI.

Here, testing is carried out for two parameters: performance and safety.

G. Bhavani, Scientist-F, Senior Director and Head, BIS Ghaziabad Branch Office, which recently conducted a Manak Manthan programme on Note Sorting Machines, says five domestic and four international manufacturers have got the licence for making these machines.

Says Bhavani, “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.”