Two suspect ₹500 notes at a village Customer Service Point
You operate a bank's Customer Service Point (CSP) in a village in Ludhiana district. On 12 March, a customer, Balwinder Kaur, tenders six ₹500 notes to deposit ₹3,000 into her PMJDY account. While counting, you notice two of the notes feel smoother and thicker than the other four; on those two the security thread appears printed on the surface rather than woven into the paper, and under the UV lamp the fluorescent band does not glow. Balwinder says she got the notes an hour ago from a milk buyer and now demands them back, arguing that a CSP operator has no authority to check or hold her money. Your cash is tallied at the 5 p.m. handover and the link branch is 14 km away. You have with you the counterfeit note detection register, an 'COUNTERFEIT' stamp and a numbered receipt book.
1. Balwinder demands her two notes back. State exactly what you do with the notes, what document you must give her, and why you cannot simply return them or send her to another bank 'for verification'.
Read the worked answer
Impound; never return. A note identified as counterfeit at a bank counter or CSP must be taken out of the cash drawer, stamped 'COUNTERFEIT' on both sides in the tenderer's presence, and retained. Returning it is not a customer-service option: putting forged paper back into circulation is a punishable offence, and the person who passes it on can be implicated.
Why not 'verify elsewhere': final adjudication rests with the currency chest and the RBI, not with the tenderer or a neighbouring bank. Once the note leaves your counter, the chain of custody and the evidence are lost.
Documentation: issue a numbered receipt showing denomination, number of pieces, serial numbers, date, your CSP code and Balwinder's name and address, and obtain her signature on your office copy. Enter both notes in the detection register. Inform the link branch the same day and send the notes under a forwarding letter; the branch files the police complaint/FIR as per the bank's board-approved policy (the threshold varies between banks, so confirm your bank's rule rather than quoting one). Offer to show her the security-thread and UV features at the counter, but promise no replacement - a counterfeit note carries no value at all.
2. Balwinder still wants ₹3,000 credited. Work out what is posted to her account, how the day's cash is reconciled, and where the impounded notes sit in the records.
Read the worked answer
Only ₹2,000 can be credited. She tendered six notes but two are worthless paper, so the deposit voucher is corrected to ₹2,000 and she signs the correction before posting. The four genuine ₹500 notes enter the cash drawer and form part of the day's receipts.
The two impounded notes are entered in the counterfeit register and kept in a separate cover with the receipt copy. They are never counted as cash: they have no value, cannot be remitted as cash and must not be netted against the deficit.
Reconciliation at 5 p.m.: opening cash + genuine receipts − withdrawals/remittances = physical cash in the drawer. Had you posted ₹3,000 and kept only ₹2,000 in the drawer, the tally would show a ₹1,000 shortfall that is impossible to explain once the notes are with the branch. That is exactly the error to avoid.
The impounded notes travel separately to the branch under a forwarding letter with the register extract. Tell Balwinder plainly that the ₹1,000 is not credited and that any recovery from the milk buyer is her own civil matter; the CSP must not make good the difference from its own cash.
3. Balwinder says the bank exchanged a torn ₹500 note for her last month, so 'a damaged note is a damaged note'. Explain the difference and what value each type carries.
Read the worked answer
Two entirely different legal categories, and the difference is value.
A mutilated note is a genuine RBI note that is torn, cut, worn or partly missing. It is examined under the RBI (Note Refund) Rules, 2009 as amended, and the bank pays full value where enough of the note survives, half value in the boundary cases the rules prescribe, and nil where the surviving area falls below the threshold. The bank is buying back its own damaged paper.
A counterfeit note is not RBI paper at all. It has no value in any condition, is impounded, and never attracts an exchange. The customer's remedy is only against the person who passed it.
So the exchange she remembers was a refund-rule transaction on genuine currency, not a certification of a forged note. Say this in one sentence and do not debate: a forged note is confiscated, a torn genuine note is exchanged. If she disputes further, give her the receipt number and the branch contact so the grievance goes on record rather than becoming an argument at the counter.