An RBI-bound cash consignment exposed a ₹4.36-lakh shortage, triggering a deeper audit that reportedly uncovered the much larger substitution. Investigators are now examining CCTV footage, cash registers, machine logs and access records.
BY PC Bureau
September 1, 2026: The alleged replacement of genuine currency worth around ₹7.4 crore with counterfeit notes inside a Punjab National Bank (PNB) currency chest in Saharanpur raises a question that goes beyond the suspected fraud itself: how could such a large-scale substitution occur inside one of the banking system’s most tightly controlled cash-storage points without being detected earlier?
An FIR has been registered against bank officials and private individuals, while a Special Investigation Team (SIT) has been formed to establish how the alleged fraud was carried out. The complaint was filed by PNB nodal officer Arun Kumar Chaubey at Sadar police station. Senior divisional manager Ravi Kumar and currency chest managers Sushil Sharma and Amit Kumar have been named among the principal suspects.
The case surfaced after a cash consignment sent to the Reserve Bank of India (RBI) on August 10 showed a shortage of ₹4.36 lakh. A subsequent detailed audit reportedly uncovered a much larger discrepancy, with genuine notes allegedly replaced by counterfeit currency. The exact amount of fake currency is still being established as counting continues.
But the discovery immediately raises questions about the controls that should ordinarily make such a substitution difficult.
The first question: who had access to the cash?
RBI rules stipulate that cash forming part of a currency chest balance must be in the custody of joint custodians and freely available to them. Cash kept outside the vault, outside CCTV coverage or under the control of a single official is not eligible to be counted as part of the chest balance.
Investigators will therefore have to reconstruct the access history of the Saharanpur chest: who entered the vault, when, for what purpose and in whose presence?
If genuine notes were physically removed and replaced with counterfeit notes, the investigation will need to establish whether the alleged substitution occurred during the opening of the chest, cash processing, packing of remittances, receipt of cash from branches or some other stage.
The CCTV footage could be crucial. RBI rules specifically require CCTV and prescribe compliance with recording and preservation requirements, while non-functioning CCTV or related violations can attract penalties.
Were the notes actually machine-verified?
A second question concerns the currency chest’s note-sorting machinery.
RBI requires currency chest branches to have verification, processing and sorting machines and says they should be used to their optimum capacity. Banks are also required to maintain daily records of notes processed through these machines, including counterfeit notes detected.
The investigation will therefore need to examine machine logs, maintenance records, denomination-wise processing data and records of counterfeit notes detected.
If the alleged ₹7.4 crore substitution involved counterfeit notes that passed through the chest’s normal processing chain, investigators will have to determine whether the notes were ever subjected to machine authentication. If they were, why were they not rejected? If they were not, why were the relevant batches not processed?
RBI instructions also require notes received by currency chest branches to be processed through note-sorting machines, particularly notes of ₹100 denomination and above, before they are issued or remitted.
Could the accounting trail have masked the physical shortage?
A currency chest is not simply a vault full of cash. Its physical holdings are supposed to correspond with transaction and reporting records.
RBI requires currency chests to report transactions and ensure the correctness of figures reported through its currency-management reporting system.
That makes the accounting trail another critical part of the investigation.
The SIT is likely to compare the physical denomination-wise cash balance with chest registers, daily closing figures, remittance records and RBI reporting data. Investigators will also have to identify the point at which the book balance and physical cash allegedly diverged.
If the genuine notes were removed over a period of time, the question becomes why routine reconciliation and inspection did not expose the growing gap.
What did surprise inspections find?
RBI’s framework provides for surprise verification of currency chest balances. The current penalty framework specifically refers to surprise verification at bimonthly intervals by officials unconnected with currency-chest operations and six-monthly verification by officials from the controlling office.
Those inspection reports could prove particularly important.
Investigators will want to know when the last physical verification took place, who conducted it, what denominations were counted, whether the verification was genuinely independent and whether any discrepancies or irregularities were recorded.
If counterfeit notes were already present during an earlier inspection, that could significantly change the timeline of the alleged fraud.
The remittance to RBI may have been the weak point—or the trigger
The ₹4.36-lakh shortage detected in the August 10 consignment appears to have been the immediate trigger for the deeper scrutiny.
That raises another question: was the alleged substitution confined to the currency chest, or did it extend into the preparation of outward remittances?
RBI instructions require safeguards during both processing and transit of currency and require that only properly sorted and machine-examined notes be sent onward.
Investigators will therefore have to trace individual consignments, packing records, denomination-wise statements and the chain of custody from the chest to the RBI.
The counterfeit trail could reveal when the swap happened
The counterfeit notes themselves may provide another clue.
Investigators can examine denominations, serial-number patterns, batches and the physical characteristics of the fake notes to determine whether they entered the chest in one large substitution or were introduced gradually.
If counterfeit notes are concentrated in particular bundles or denominations, that could help investigators identify the stage at which the alleged replacement took place.
The question will also be whether the counterfeit currency came into the chest from outside or was introduced after genuine currency had already been stored there.
Was this an insider operation?
The fact that bank officials have been named in the FIR makes the question of insider access central to the investigation—but their involvement remains an allegation until established by evidence.
The SIT will need to examine staff deployment rosters, vault-access records, CCTV footage, cash-handling duties, leave records, transaction logs and communications to establish whether particular officials repeatedly handled the affected cash.
The separate complaint against housekeeper Vishal Kumar concerning another cash shortage at the same branch will also have to be examined independently to determine whether it has any connection with the larger alleged substitution.
READ: Rs 7.4 Crore Genuine Currency Swapped With Fake Notes at PNB
Rs 7.4 Crore Genuine Currency Swapped With Fake Notes at PNB https://t.co/ZCjpojhVGU #BankingFraud #CurrencyChest #CounterfeitCurrency #Saharanpur #SITProbe
— POWER CORRIDORS (@power_corridors) September 1, 2026
A system designed with multiple checks
RBI’s currency-chest framework is built around several overlapping safeguards: joint custody, CCTV surveillance, machine-based authentication and sorting, daily accounting, reporting to RBI and periodic independent verification. RBI has also specifically identified non-functioning CCTV, non-use of note-sorting machines and failure to conduct surprise verification as operational violations.
That is why the Saharanpur case is potentially significant beyond the alleged ₹7.4-crore loss.
If the investigation establishes that genuine currency was systematically removed and counterfeit notes substituted, it will have to determine which layer of the control system failed, whether several controls were bypassed together, and whether the alleged fraud was made possible by collusion rather than a single security lapse.
For now, the most important evidence is likely to lie in the CCTV archive, currency-chest access records, note-sorting machine logs, physical verification reports, denomination-wise cash registers and the complete chain of custody of remittances sent to the RBI.
The answers to those questions could establish not merely who allegedly took the genuine currency, but how a ₹7.4-crore discrepancy remained inside the system until an RBI-bound consignment exposed it.
