The old currency notes which have been demonetized by the Indian government on Nov 8 can be used only at petrol pumps, for paying the bills of government utilities till December 15 and for making deposits in the bank till Dec 30. In fact, notes of Rs. 1,000 have already been ceased from being used other than for depositing in the bank. But have you ever thought what will RBI do with these old currency notes?
Nearly 18 billion notes of Rs. 500 and Rs. 1000 have been sent back to the RBI and surprisingly, their value is around Rs. 14 lakh crore. As per the government sources, the RBI will shred these notes and send for recycling.
Most of the RBI branches have shredding centres where these notes will be converted into heaps of short strips. These strips will be turned into pulp and will be given the shape of compressed blocks or briquettes and then it will be used for the purpose of making stationary material such as files, boards, calendars, etc. This method is being used by the RBI after 2001 as before that, the old notes were burnt for disposal purposes.
At the present time, most of the central banks of the world use dirty and soiled notes for making briquettes. The shredded strips are compressed hard into thick mass and mostly they are cylindrical. The weight of these large briquettes goes up to 600 kg/cubic metre. These briquettes were used in Hungary in the year 2012 as fuel for fire which helped the poor to keep themselves warm in the winter season.
As per the information coming from the sources, the RBI was ready with their plan on how to deal with old notes even before PM Modi made the announcement. A pilot project was started and for this purpose, a plywood firm from Kannur, Kerala was selected. Few bags filled with strips of shredded notes were sent for pulping.
The Kannur firm has now entered into a contract with the RBI to pay Rs. 250/ton for processing 40 tons of strips of shredded notes. These strips will be thrown with fine wood chips and then pressed heavily. However, the briquettes will be sold through tenders and Rs. 5-6 is expected for per kilo sold.
The RBI regularly pulls out damaged currency notes of different denominations from the circulation after which they are examined and sorted out. The ones which are not in the condition of getting used again are disposed by the RBI under CVPS (Currency Verification and Processing System).
So now you know as to what will happen to the old currency notes of Rs. 500 and Rs. 1000.
Did you know it earlier?
