What Will Happen To Demonetized Notes?

Have we ever wondered what will happen to the old demonetized notes that are deposited in the banks?

The government has collected about 18 billion notes of old currency, amounting to INR8 trillion. Previously, the government just chose to burn the demonetized money, but the huge volume of the current drive would add to massive pollution.

The Reserve Bank of India is now seeking contracts with hardboard manufacturers and it is selling old, shredded notes to them so that they are recycled. This is a more efficient way of disposing the old notes rather than burning and it reduces the carbon footprint. RBI has begun verifying and purchasing 40 note shredding machines in 19 different cities across India. These imported machines can shred and destroy about 250,000 notes in an hour. The notes are shredded at the rate of INR250 per metric ton and the RBI shreds about 60 tons of notes per week.

RBI’s Kerala branch in Thiruvananthapuram has already sent the shredded currency to a hardboard factory in Kannur. The factory uses 5% of the paper pulp from shredded notes to be mixed with 95% wood pulp for producing hardboard.

The shredded currency is also sent to Dubai to produce furniture items like photo frames, mirror frame backing, book shelves and drawer bottoms. They are also converted into biomass briquettes to be used as fuel for factory boilers. Biomass briquettes have a less negative impact on the environment, since they are made of renewable materials and do not deplete natural resources.

This initiative taken by the government to recycle old notes sets an example for the entire country and depicts the importance of recycling resources.