The Reserve Bank of India (RBI) has asked banks to test their note sorting machines for accuracy and consistency every quarter to ensure currency notes conform to the prescribed parameters. ‘Note Sorting Machines – Authentication and Fitness Sorting Parameters’, a fit note is “a note that is genuine, sufficiently clean to allow its denomination to be readily ascertained and thus suitable for recycling”.
An unfit note is one that is not suitable for recycling because of its physical condition or belongs to a series that has been phased out by the Reserve Bank of India.
The RBI directed banks that note processing machines/note sorting machines will do the authenticity check from time to time. Any note which is not found to be having all the features of a genuine note shall be classified by the machine as suspect/reject.
Further, as per the circular, the banks will have to send fitness reports of currency notes every three months to the RBI. The banks will have to inform RBI about the number of notes which were found unfit and notes that can be reissued after proper maintenance.
According to the RBI circular, notes with any visual or physical defects are to be sorted as unfit as per the following criteria:
1. Soiling: It refers to the general distribution of dirt across the entire note or in some patterns. It is a measure of the loss of reflectivity from the unprinted areas due to dirt, ageing (yellowing), wear, and extraneous markings and includes decolouration due to ageing, excessive folding and other wearing.
2. Limpness: It relates to structural deterioration resulting in a marked lack of stiffness in the note paper. Notes with a very low stiffness of paper will be sorted as unfit.
3. Dog-ears: Banknotes with dog-ears with an area of more than 100 mm² and a minimum length of the smaller edge greater than 5 mm shall be sorted as unfit.
4. Tears: Notes exhibiting at least one tear at the edge will also be considered unfit.
5. Holes: Notes with holes with area exceeding 8 mm² will be sorted as unfit.
6. Stains: Localised concentration of dirt will also make the note unfit for use.
7. Graffiti: Graffiti refers to the deliberate graphic alteration of the note with, for example, figures or letters. Fitness sorting criteria in case of graffiti shall be the same as those for stains.
8. Crumples/Folds: Crumpled/folded notes shall be sorted as unfit if the folds result in a reduction of the original note in length or width
9. Decolouration: Notes affected by decolouration shall be sorted as unfit if the ink is partially or wholly missing from its surface.
10. Repair: Note that repaired using adhesive tape/ paper/ glue will come under the unfit category.For further : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12347&Mode=0