Money & Banking
Counterfeit notes from ATMs or tellers: The latest position

This is a subject Moneylife has written on many times in the past. It now appears that RBI has finally taken some steps. It is now up to you as a consumer to ensure that your bank/branch/ATM is subscribing to those RBI directives

The Reserve Bank of India (RBI), to its credit, has one of the best online adherences to the Right to Information (RTI) Act of India. Much of what you want to know has already been proactively declared, and existing circulars as well as guidelines are neatly arranged as well as very searchable. They also tend to be clubbed together by subject once or twice a year on the 1st of July and sometimes also on the 1st of January. The central bank is also very prompt in acknowledging and responding to RTI applications. Most of all, unlike certain other public authorities, the RBI tends not get stuck on technicalities like demanding small amounts of money for photocopying charges—especially when the postage used for said demands is more than the demand.

(The ministry of railways, for example, has been known to spend Rs35 on SpeedPost charges to make a demand of Rs2 for photocopying a one-page response.)

So it is amply clear that when answers to specific questions are not available from the RBI that something is really amiss. And that's exactly what happened with queries put to the RBI by this correspondent on the subject of accountabilities as well as guidelines in context with currency notes issued through ATMs operated by independent companies and other sub-contractors for banks and soon to be operated by non-banks too. As readers may be aware, more and more banks are sub-contracting the ‘business’ of operating ATMs to outside companies, and this is where the grey area lies.

Because, simply put, the RBI has issued fairly explicit guidelines to the banks on issue of currency notes. However, it is amply clear that there is a missing link between the banks and the various agencies involved in maintaining, stuffing and operating the ATMs. To put it in simple terms—there is no public document or guideline from the RBI to the banks or the banks to the ATM operating sub-contractors on what precautions need to be taken for currency notes dispensed from ATMs which are maintained by outside sub-contractors. To a point where there is no clarity or accountability now even on an ATM which is on-site at a bank’s own premises—since it is totally maintained and operated by an outside vendor.

This is the position as per RBI, in its response...

# RBI’s directive under Section 35A of the Banking Regulation Act, 1949, along with Circular DCM Cir.NPD.3161/09.39.00 dated 19 November 2009 makes it imperative for all scheduled banks that currency in denominations of over Rs100 should be re-issued by banks over their counters or through ATMs only if these banknotes are duly checked for authenticity/genuineness and fitness by machines.

# Further, in para 127 of the Monetary Policy statement 2012-13, banks have to ensure that currency notes of all sorts received over the counter are re-circulated only after their proper authentication through machines, and to streamline their system in a manner which will make them bear the risk of counterfeit bank notes rather than the common man. Guidelines as per DCM’s circular No. 5063/16.02.22/2011-12 dated 9 May 2012.

# There is no guideline from the RBI to the common man on what she is supposed to do if presented with a counterfeit currency note from an ATM or teller. However, there is a Master Circular DCM (FNVD) No G-5/16.01.05/2012-13 dated 2 July 2012, which is trickily worded. In as much as it uses the term “counterfeit currency tendered” to apply—so, in effect, once an ATM (or teller) has dispensed a fake currency note, any return of the same currency note by the customer even to the same bank is viewed as ‘tendering’ fake currency. A long and convoluted police reporting process follows—in which it appears that the main suspect will be the customer or said common man.

So what can the “common man” do in this case?

There is a small window of safety for the customer/”common man” vide para 6 of Master Circular 2012-13 on “Detection and impounding of counterfeit notes”. It is now imperative and mandatory on the part of all banks irrespective of volume of daily cash receipt, to provide the facility of machine processing—and not to put currency notes back into re-circulation without this. Not doing this is in violation of Directive No 3158/09.39.00 (Policy). / 2009-20 dated 19 November 2009. This applies to currency notes dispensed through both teller as well as ATM.

Towards this, the RBI has issued guidelines on “Note Authentication and Fitness Sorting Parameters” in May 2010, which make it contingent on the bank/branch to provide at least one counting machine (with dual display) for public use and all banks/branches to be equipped with ultra-violet lamps or other appropriate banknote sorting / detection equipments.

Read together, this means that at least for on-site ATMs, a customer should have the facility to check currency notes before accepting them.

In addition, if you are using ATMs which are off-site (or even on-site) then it is incumbent on the bank/branch under which said ATM operates to ensure that only those currency notes which have been machine sorted are put back into circulation, and issued to customers. This is vide DCM (FNV) No. 5063/16.02.22/2011-12 dated as recently as 9 May 2012. The responsibility even for an off-site ATM and certainly for an on-site ATM lies totally with the branch.

To the best of my knowledge, and after visiting four PSU bank branches and two private bank branches close to where I live, none of the branch managers or accountants had the faintest clue of what I was talking about when I quoted and showed them this circular. According to them—the responsibility was totally on the sub-contractor who stuffed the ATM. Their role was largely all about indicating when the ATM ran out of money or stopped working. Everything else, including authenticity of the currency, was the responsibility of the un-named sub-contractor.

Where I live, which is South Delhi, that means three or four grungy looking men in a decrepit van, plodding along with money carried in black steel trunks, pulling down the shutter of the ATM and doing whatever they feel like inside. The inside of the room where the ATM vests looks like a small dhaba, also used by all sorts of people to rest in, sit in and generally do what they want—since it is air-conditioned. To put it bluntly, it comes down to the fact that we rely on sub-contracted staff from a bank’s sub-contractor for keeping our currency honest.

To sum it up, you have to ask your bank branch manager or the manager of the branch which holds responsibility for the ATM you use, whether the ATMs or tellers under their charge are in adherence with RBI’s circular DCM (FNV) No. 5063/16.02.22/2011-12 dated 9 May 2012. And if not, why not?

Good luck. And here's the relevant link:

(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love—writing.)



arun adalja

5 years ago

i think responsibility lies with the branch which is linked to atm for any notes and whether it is filled by subcontracting people.

Vaidya Dattatraya Vasudeo

5 years ago

With reference to Air-conditioned ATMs, almost all of them has a very obnoxious smell. One of the reason is the people who occupy it because of the cool temperature. There should be arrangement for fresh air circulaton.

Sudheer M

5 years ago

I had an instance of getting 400 rupees short from Punjab National Bank, HSR Layout. In the amount dispensed, I found that among the group of 500 Rupee notes, a hundred rupee note was kept in place of 500 rupee note. My loss of 500 rupee was told to the call center, which asked me to call next day as their "systems" were not working. Finally, the case was rejected by them saying amount disbursed is not short. I have taken it up with the branch manager now who has asked me to meet this Saturday.



In Reply to Sudheer M 5 years ago

u may not get the amount, as the number of note pieces left inside the ATM will not differ and ur claim is not irrefutable because loading cash and dispensing cash in ATM is electronically accounted and if their was any tampering of Rs 500/- with Rs 100/- in 500 tray the ATM cannot track. only if this happens repeatedly in a particular ATM surprise verification of the ATM can be carried out.

as regards to fake note Private agencies assigned with loading of cash draw it from Banks only and usually they draw in the range of Rs 3 - 5 crores in a single withdrawl from Bank and they are in no position to check every piece of note as these have to loaded in about 20 machines averaging Rs 12-14 lakhs in each ATM it will be no less than 25-30 minutes when they move from one ATM to the next. of course the men of agency can introduce one counterfeit currency in each ATM daily and still go scot free. only way this loading counterfeit notes to a large extent is cash should be organised by Banks in sealted ATM trays which can be inserted into ATM and the earlier box broght back with undelivered notes but this is difficult to implement.

Veeresh Malik

In Reply to Sudheer M 5 years ago

Dear Sudheer M - thank you for writing in.

Please do not delay and wait - please get on to the RBI website and lodge a formal complaint online too, in paralel.

Here is one link:-


Sudheer M

In Reply to Veeresh Malik 5 years ago

Thanks a lot for the information here sir. I had a meeting with the manager on Saturday, and he credited the money on Tuesday. Interesting thing was that he was not ready to accept earlier that he was responsible for ATM and I had to quote your article. Later he started blaming the outsourcing agencies/Staffs and everything under the sun. I think there should be a clear notice inside the ATM room that they should contact branch manager for any discrepancy in the money they received including counterfeit notes.

anantha ramdas

5 years ago

How do we know that the sub-contractor who stuffs the ATMs is not putting in the fake notes?

If an ATM belongs to a Bank it should be their responsibility to ensure that they fill the machine with currency after checking for counterfeit notes.

Also, bank tellers must have a counterfeit currency detecting machine which can be viewed by the customer, and then only the amount be put through the process of "checking" and delivered to the customer. As of now, when you and I accept money from a teller, we assume it is genuine and not fake. At the same time, when we deposit money, these currency notes be delivered in the same reverse process, so that the teller also knows that the notes are "real". The system should work both ways.


Veeresh Malik

In Reply to anantha ramdas 5 years ago

Dear Anantha Ramdas ji, thank you for writing in, and exactly yhr point I was trying to make too.

As of now, I can only suggest that you ask your bank managers whether they are adhering to the RBI circulars quoted for both receipt as well as dispense, onsite and offsite, ATM and teller - wrt currency notes.

best of luck and regards/VM

US presidential polls: Romney’s right turn

It is difficult to see how Paul Ryan will appeal to the independent voter who is in the middle of the political spectrum rather than to the right. Mitt Romney’s decision is bold. The question is—is it wise?

It is a move to energize the base. It is a move to break out in the polls. It is a choice which recognises where the new power in the Republican Party lies. The choice of Paul Ryan, the “Darling of the Right” by Governor Mitt Romney to be his vice-presidential running mate is a move by Governor Romney away from his centrist roots to the right. It is the completion of the transformation of Governor Romney from the Massachusetts moderate to a full-blown conservative. As the Republican moderates have slowly disappeared and the middle of the Republican Party has fallen through. Governor Romney has decided to follow the Republican Party instead of getting the Republican Party to follow him and for that he has chosen Paul Ryan, the young dynamic ideologue, who is the chairman of the House Budget Committee and a thorn in President Obama’s side.


The young representative from the Midwestern state of Wisconsin (representing its first district) will immediately put the key swing state of Wisconsin and possibly the Midwest into play, goes the calculation. But more than that it is a recognition of who the boss in the Republican Party is and that is the right. The small town roots of Paul Ryan, he comes from the Jane’s town in Wisconsin, his amazing rise, his youth, his energy, will all help the Romney ticket to move on and there is already great enthusiasm as Romney and Ryan campaign together.


What got Paul Ryan onto the Republican ticket is undoubtedly his brain power and energy. He has been a foot soldier and a general for the right and the fact that he rose from the Republican ranks working among others with Jack Kemp who served as housing secretary in the administration of President George Bush and was the Republican Party’s nominee for vice-president in the 1996 election where he was the running mate of presidential nominee of Bob Dole. Further he has an appealing back story about life in a small town in Wisconsin, his resilience after his father’s premature death and his allergenic family. His interests are hunting, fishing and noodling (catching catfishes with his bare hand), which he said on CNN, was great fun which all make for an attractive story.


But he comes with a lot of baggage. His proposed budget is highly controversial with a lot of cutbacks and the choice of Paul Ryan enables President Obama and the Democrats to run against Congress, which is deeply unpopular as they can tie more closely to the Romney ticket.


The choice of Paul Ryan does nothing to bolster the Republican vote in two key constituencies where they are lagging behind the Democrats badly—women and minorities. Actually the choice of Paul Ryan is likely to make the female vote gap between the parties sharper as Paul Ryan is socially very conservative and believes that life begins at conception and opposes funding for contraception. This choice is likely to throw more women in the arms of the Democrats and it does nothing to strengthen the Republican Party’s appeal among the minorities and Hispanics who are a key voting block. The choice of Senator Marco Rubio of Florida would have possibly done both. It is particularly difficult to see how Paul Ryan will appeal to the independent voter who is in the middle of the political spectrum rather than to the right. Representative Paul Ryan is particularly known for the attitude on Medicare, the programme that provides health care for seniors, and Representative Ryan’s policies are going to frighten seniors. But what Paul Ryan will do is keep Governor Romney honest i.e. to the core beliefs of the Republican Party and sharpen the debate with the Democrats. They have dubbed themselves as the come back team. Indeed the trillion dollar deficit may take centre stage rather than the 8.2% unemployment rate as will trickle down economics.


David Axelrod, President Obama’s advisor, told Candy Crawly on the State of the Union programme of CNN that Mitt Romney was paying only 13.9% income tax and  under Paul Ryan’s budget he would pay only 1% tax.


The debate has been sharpened and at stake is the direction in which America is headed.

Mitt Romney’s decision is bold. The question is—is it wise?


The truth about Mercedes India-2: Absence of regulation

After filing several complaints with various authorities including the Competition Commission, Cama Motors, which raised a stink about Mercedes Benz, asks if there is any authority in India which can take a decision on such matters in customers’ interest

Ahmedabad-based Cama Motors, one of the oldest and most reputed dealers of foreign cars, has written several letters to the Competition Commission of India (CCI) asking it to investigate the dodgy business practices of Mercedes Benz in India. Cama Motors, a former dealer of Mercedes, which fell out with the auto giant, says it has gathered dozens of pieces of hard evidence and is awaiting an appropriate body to take on the job of verifing or rejecting it "in an atmosphere of fairness".  So far it has failed to find any such body.


The dealer has also filed complaints with Daimler AG, the German Embassy in India, the ministry of surface transport, ministry of heavy industries, the US Ambassador to India, the Federation of Automobile Dealers Associations of India (FADA), and the Automotive Research Association of India (ARAI). But till today, there is a complete silence from all the authorities concerned on all the grave charges of safety and other issues it has made. 


In his complaint to the CCI, Rustom Cama, executive director of Cama Motors alleges  “rampant malpractices” by Mercedes Benz regarding its aftermarket services. He says, barely a passing interest has been shown by the authorities, even though the safety issue has led to at least two deaths. In one case, the son of its customer died in a car accident becuase the airbag failed to inflate. When Cama sought the data relating to that episode, he received a letter from the company saying that the data was destroyed. Cama claims that he is in a position to prove that the report on the failed airbag was fake. 


Moneylife has all the documents backing the claims made by Cama Motors.

Another issue raised by Mr Cama is that of defective brake transmission. This is a more complicated case, where he says, Mercedes Benz is aware of the “defects in brakes transmissions", but carries out corrective action in secret  during “service campaigns” which require the car to be sent to the dealer/workshop. Customers have to leave their vehicles behind for “an unjustified period without explanation”, to allow all this ‘unofficial’ work to be carried out, otherwise they risk missing out on a life saving procedure, he alleges.


Interestingly, several readers have responded to the first report on Mercedes and its quality of service in India. One of them, Deepak Sanchety writes, “The problem is much worse with Mercedes. Their workshops do not have an inventory of common spares even for the current models. For replacement of something like a battery, your car may get stuck for weeks as the “workshop will source it from Pune”. For smallest of problems your car may need more than one visit to workshop as you may find after having paid the bill for repairs, the problem still persists. What is worse is when you send the car back to workshop; you will get other bill for another replacement of part for the same problem.”


“The car manufacturer does not have any control on dealers and workshops. So if you have any complaint against the workshop, there is nobody who would listen to you, be it the Indian Company or their Global HQ,” Mr Sancheti, who has worked with the capital market regulator and the income tax before starting his own corporate practice, added.


Mr Cama alleges that dealers are forced to sign one-sided agreements, which are “totally immoral and unethical” and include “non-disclosure pacts”. This leaves the dealer facing “commercial and reputational suicide”. Illegal activities were forced to be carried out by dealers with the name “additional customer satisfaction campaigns,” he said.


According to Cama Motors, there is a document where cars of the same series of chassis numbers have had their airbags replaced but such documents are maintained secretly by the company and such operations are carried out selectively by dealers.


It said, in 2007, Manish Patel, who was driving an E class Mercedes in Ahmedabad, lost his life when all three airbags in the front row failed to inflate. Similarly, in November 2011, Nirmal Saraf lost his life when travelling in a Mercedes S class as the airbag failed to open. In this accident only one airbag was inflated, unfortunately it was a vacant seat.


According to Cama Motors, in case of Manish Patel’s death, the company sent one engineer, Lothar Shuzzare from Germany to inspect the car. After repeated attempts, Mr Shuzzare and Mercedes Benz gave some incomprehensible technical data on a single sheet and now the company is saying that the data was destroyed since many years have passed. And yet, the same person was dispatched by the company to inspect the S class vehicle in which Nirmal Saraf died.


While in the first case Mr Shuzzare inspected the E Class of the Patel family at the spot, in the second case he demanded the S class vehicle to be handed over the Daimler AG for a report. “His claim was that the technology of Mercedes Benz is analyzable only by their own people. He even mentioned that the police in Europe also have to come to Daimler for investigating accidents,” Cama Motors said.


It added, “This is the stand of a man who has already submitted a report of airbag performance of our customer’s car with fake data! The truth is that Daimler never releases the full code and knowledge of control unit software so that market ready, freely available and legal scanning machines can fully read and analyse the memories and other devices of the car”.


Cama Motors, along with Vimal Saraf and a representative of the Patel family on 19 April 2012 met the Additional Director General of CCI. However, there is not much progress.


The issues Mr Cama raises have deep implications. If a reputed car manufacturer can indulge in questionable business practices but a customer does not have anyone to turn to for redressal, it is high time to have proper checks and balances and more importantly a regulator who understands and can deal with today’s as well as future generations of automobiles.


Mercedes Benz India, however, has refuted all the allegations made by Cama Motors. In an email response, it said, “We strongly refute all the allegations levelled against us. We find these comments highly defamatory, vexatious and frivolous in nature and Cama Motors (our estranged dealer) is trying to tarnish our image; as such Mercedes-Benz India will pursue suitable legal course of action. We would also like to mention that a defamatory suit has already been filed against Cama Motors in Ahmedabad for similar defamatory activities carried on by him.”


Rustom Cama says, “The battle between Cama Motors and Daimler AG is not contingent on anybody’s support or help and we will pursue our duty to its end. However the lack of regulation and the sorry state of this country where even the Monopolies and Restrictive Trade Practices Commission (MRTPC) Act seemed better than its replacement cannot be handled by us. I am sure that the CCI does not even see itself as the relevant body for the range of issues raised by us and the ministries concerned have the impunity to disregard facts in spite of using the RTI act".


The battle may ultimately be fought in court, since Mr Cama has no intention of backing off and has spent considerable time and resources in piecing together information, purchasing testing equipment to prove his point and gathering evidence. 



Chris Haris

4 years ago

Mercedes is one of the best car manufacturing company over the years and still going great in Worldwide. Mercedes famous for its expensive luxury and sports car. It has been doing great business in Sub-Continent over the years. Mercedes Benz is one of the best luxury car that I have ever seen. The Automotive market of a particular car brand will be go well, if the management and regulatory system of the company performing the best they have. Mercedes is one of the best car manufacturing company over the years and still going great in Worldwide. Mercedes famous for its expensive luxury and sports car. It has been doing great business in Sub-Continent over the years. Mercedes Benz is one of the best luxury car that I have ever seen. The Automotive market of a particular car brand will be go well, if the management and regulatory system of the company performing the best they have.
Mercedes is one of the best car manufacturing company over the years and still going great in Worldwide. Mercedes famous for its expensive luxury and sports car. It has been doing great business in Sub-Continent over the years. Mercedes Benz is one of the best luxury car that I have ever seen. The Automotive market of a particular car brand will be go well, if the management and regulatory system of the company performing the best they have.


Yogesh Sapkale

In Reply to Chris Haris 4 years ago

Thanks for your comment, although it appears to be copy-pasted from the company site. Anyway.
Just explain, why this once iconic brand has lost its market share to BMW and Audi in India? Try finding answers and you will get the truth.

Parimal Raj

5 years ago

My experience with Merc ownership has been altogether different than what has been mentioned here. But rather than explaining those things, I would like to know why was the dealer silent for so long ? Why he came out with this when he was fired from dealership ?
As far as clutch plate is concerned, I think this must be age old story as new one comes with auto transmission, so no manual interference. Mine has 7speed 7G tronic auto trans & it is one of the best I have used, far better than my BMW.

Now please see the following links -

BMW to pay $3M fine for US recall issues -

BMW North America agrees to $3m safety fine -

But still I trust my Beemer (BMW). Similarly, for me Mercedes remains my first love [hope my girl friend is not reading this ;) ] and no matter what is being said, my experience is fantastic and hence least bothered about it.
BTW, I feel 99% of comments made on this article are by those who have never owned a Merc, which is best to be ignored.

And those who feel Volvo is safe, also need to look at this video -

Apart from this, I would like to thank you Ms. Dalal for publishing my comment in your article on Worldspace Radio when it was discontinued.

Dr V S Prasana Rajan

5 years ago

Thanks for exposing the negligence of Mercedes. Also, enough prima facie evidence is available through the media, which will enable the public to access the same, and lodge a complaint with the magistrate under whose jurisdiction the HQ of Mercedes Benz is located, so that they are made accountable for their actions covered under Section 287 of the Indian Penal Code, 1860, dealing with Negligent conduct with respect to machinery.-- "Whoever does, with any machinery, any act so rashly or negligently as to endanger human life or to be likely to cause hurt or injury to any other person, or knowingly or negligently omits to take such order with any machinery in his possession or under his care as is sufficient to guard against any probable danger to human life from such machinery, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both."



5 years ago

Thank you for these set of articles . Makes me very wary about investing in such high priced cars.


5 years ago

Approach the High Court.


P M Ravindran

In Reply to Ravindra 5 years ago

From the frying pan into the fire?

Veeresh Malik

5 years ago

It is very interesting to note that Mercedes Benz is threatening suitable legal action variously. Should be certainly suggested that Mercedes Benz India Ltd., their associates, subsidiaries, parent entities, Directors, previous Directors, officers of the company and managers, et al, be prepared to come to the legal system of India with clean hands.

Such threats against the freedom of the press may have worked in other times and other regimes of the sort that Daimler / Mercedes-Benz have worked within. Here, this is India, and we have a tradition of standing for the truth.

For example, in the worst of the days during the Second World War, India maintained its traditions of not just saving Jews from persecution, but also safe-guarded their interests. What did companies like Daimler Mercedes do then, with their great "traditions", threaten the media some?

Mercedes benz India is well advised to mend its ways, apologise to the readers of MoneyLife, and clean up their act in India.


Deepak Gupta

In Reply to Veeresh Malik 5 years ago

I seriously doubt Mercedes actually wants to go to teh courts on this - that will only open up the entire history to further scrutiny and place it on public record!

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