Where will the old Rs500 and Rs1000 denominations end up at?
NewDelhi,Nov11:The Reserve Bank of India data shows that in terms of value currency notes of Rs 17.77 lakh crore was in circulation in India on October 28. And, about 86 percent of the money in circulation, as on March 31, was in the form of Rs 500 and Rs 1000 currency notes.
In terms of volume, a total of 9026.6 crore bank notes were in circulation in the country, as on March 31. Of the total number of currency notes, 2,203 crores or over 24 per cent consisted of Rs 500 and Rs 1,000 denominations.
RBI officials have said that they are prepared to dispose of the currency notes. This will be done in accordance with the established rules for disposal of soiled notes.
“These notes will be deposited at the Issue offices of the Reserve Bank. Then the notes will be examined, sorted and the unfit among them disposed of under the currency verification and processing system (CVPS). We will have to examine these notes to ensure they are not fake,” the RBI said.
HOW WILL NOTES BE DISPOSED OF?
The shredded notes will be converted into briquettes weighing about 100 grams. Under the current practice, the briquettes are sold for industrial use through a tender invited by the RBI.
The shredded currency is also recycled into various products including paper weights, calendars, and files.
WHAT IS CVPS?
CVPS was put in place in 2003 by the then RBI governor Bimal Jalan for faster and secure processing of soiled currency notes.
Each CVPS installation is capable of processing up to 60,000 currency notes per hour. CVPS counts the notes and examines their genuineness. Thereafter, it separates them into fit and unfit categories and destroys the unfit ones by shredding them.
The fit notes would be cut in a way so that they could be recycled into the new currency papers.
Until 2001, the soiled and torn notes, withdrawn from circulation, were incinerated. The present system is environment-friendly and does not cause any pollution.
Among the other usage, the shredded notes, processed by the CVPS have also used as fuel and at landfill sites.
HOW DOES WORLD DEAL WITH DISCARDED NOTES?
In several other countries, discarded currency notes are used for heating buildings. Bank of England did so till 1990. But, after that, the bank started recycling the notes by compost treatment, which was found improving soil quality.
In USA, the Federal Reserve Bank cuts the notes into small pieces, which are used for artistic purposes or put to commercial use by selling as souvenir