RBI Rolls Out New ₹500 Note Verification Guidelines To Combat Counterfeiting, Protect Indian Currency System

The Reserve Bank of India (RBI) has issued new, stringent guidelines regulating the verification and handling of ₹500 banknotes, sparking extensive public interest and debate. With the ₹500 note making up around 86% of total currency in circulation, these rules are set to dramatically improve India’s ability to combat fake notes and maintain a secure financial system.

The New Rules: Strengthening Security and Bank Procedures

Effective October 2025, banks are now required to use upgraded technical devices and machine verification for all ₹500 notes deposited or withdrawn. Employees must check for critical security features, including:

An embedded security thread with “RBI” and “₹500” inscriptions
A clear watermark of Mahatma Gandhi’s image visible in transmitted light
Micro-lettering and an optically variable ink that changes color (green to blue) when viewed from different angles
Evenly spaced serial numbers, intaglio printing for visual and tactile authenticity, and a ‘see-through register’ for cross-verification.

For bulk transactions or large cash deposits in ₹500 notes, banks have been instructed to conduct thorough checks, and report any suspicious activity to authorities immediately. Fake notes may be confiscated, with possible legal action against individuals knowingly attempting to use them.

What Citizens Must Do

RBI’s awareness campaign urges all citizens to carefully check the security features before spending or depositing ₹500 notes. If a note appears suspicious—due to off-center or uneven serial numbers, faint watermarks, or missing color-shifting ink—it should not be used. Instead, bring such notes to your nearest bank branch, where staff will verify them with official equipment.

The RBI and many banks now offer mobile apps for real-time note authenticity checking, helping consumers in urban and rural areas alike to avoid fraud. If you intentionally use or distribute counterfeit notes, you may face prosecution under existing Indian law.

Rumors About Discontinuation

Recent rumors about the ₹500 note being discontinued have spurred concern, but RBI has clarified that all legally issued ₹500 notes from the Mahatma Gandhi New Series remain valid and there are no immediate plans to withdraw them. The focus is on ensuring authenticity and transparency in circulation—not on demonetizing the denomination.

Impact On Daily Transactions

The new guidelines will especially affect those heavily reliant on cash—small businesses, shopkeepers, and rural communities. Everyone is advised to begin depositing any damaged or suspicious notes at banks to avoid problems in the future. Banks will exchange genuine notes for new ones as part of RBI’s clean note policy.

Final Tips for Safe Cash Handling

Consumers should check every ₹500 note before accepting it, particularly in high-value transactions, and always use banks for large cash exchanges. Awareness, careful examination, and prompt action are vital for protecting personal finances and contributing to a more secure, transparent Indian currency system.