The Reserve Bank of India (RBI) has extended the deadline by six months for banks to deploy BIS-compliant Note Sorting Machines (NSMs). The new deadline is November 1, 2025 (earlier May 1, 2025).
Key Highlights
RBI requires banks to deploy only NSM models conforming to Bureau of Indian Standards (BIS) norms.
These standards specify performance and safety requirements to ensure:
- Authenticity detection (genuineness of banknotes).
- Fitness checking (whether a note is fit for circulation or needs withdrawal).
Machines must detect defects like:
- Soiling
- Limpness
- Dog-ears
- Tears
- Holes
- Stains
- Folds
RBI guidelines (issued from time to time) specify such criteria to ensure uniformity in note processing across banks.
Background
- To strengthen the banknote sorting infrastructure, BIS published standards for NSMs on March 19, 2024 after consultation with: RBI and Other stakeholders.
- In October 2024, RBI mandated that from May 1, 2025, banks must:
- Deploy only NSM models that conform to BIS standards.
- Use machines certified by BIS.
- With the extension, the mandatory implementation date is now November 1, 2025.
Why it matters?
- Ensures uniform quality of banknotes in circulation.
- Enhances public confidence in currency integrity.
- Reduces circulation of damaged, counterfeit, or unfit notes.
- Helps banks comply with standardized sorting and detection practices.
Importance of NSMs
- Note Sorting Machines (NSMs) are critical for:
- Processing large volumes of currency.
- Ensuring only fit, genuine notes are recirculated.
- Automating note verification and classification.
- RBI’s phased implementation ensures:
- Adequate procurement and deployment time for banks.
- Alignment of banking operations with national standards.
Key Takeaways:
| Aspect | Details |
| Authority | Reserve Bank of India (RBI) |
| Extended Deadline | November 1, 2025 |
| Original Deadline | May 1, 2025 |
| Standards Body | Bureau of Indian Standards (BIS) |
| Purpose | Deploy BIS-compliant Note Sorting Machines |
| BIS Standards Published | March 19, 2024 |
| Defects Machines Must Detect | Soiling, limpness, dog-ears, tears, holes, stains, folds |