Relevant regulations: Regulations of People's Republic of China (PRC) Municipality on the Administration of RMB.
Article 33 When the People's Bank of China and the public security organs find forged or altered RMB, they shall confiscate it, affix the word "counterfeit currency" and register it. If the holder has any objection to the authenticity of the RMB confiscated by the public security organ, he may apply to the People's Bank of China for appraisal.
The public security organ shall turn over the confiscated forged or altered RMB to the local People's Bank of China.