What Will RBI Do With Old Notes?

PM Narendra Modi’s decision to scrap the high valued notes of Rs. 500 and 1000 from market through demonetization exercise is likely to suck 18 billion of these notes valued randomly at Rs. 14 Lakh Crores. To all our information, these Old Notes can be used in petrol banks till Dec 15th and can be exchanged in banks till Dec end. The next question from many is, what will RBI do with these accumulated Old Notes?

Yes, you got it right. These scrapped heaps of paper will be pulped for recycling. Banks and RBI branches send the Old Notes in bundles and stacks to recycle plants where they are grinded to pulp which is to be used in manufacturing briquettes or making office stationary items like calendars, paper weights, files and boards.

Till 2001, discarded currency used to be burnt. But, this new system of recycling is proving to be beneficial because large sized briquettes weighing approximately 600 kg per cubic meter will be sold at Rs. 5 per Kg through industrial tenders. Such briquettes are used as fuel in certain industries. 

A plywood company based in Cannanore, Kerala signed contract with RBI to process 40 tons of shredded notes per week at Rs. 250 per ton. These shredded notes will be made into fine wood chips. That’s the value of these currency notes when they are de-legalized.