As part of its ‘Clean Notes Policy’, India’s central bank has announced that 2,000 notes will no longer be in circulation in the world’s fifth largest economy. The Reserve Bank of India has set September 30, 2023 as the deadline for redemption of the obsolete notes.
The notes, however, will remain legal tender. 2,000 banknotes accounted for 10.8 percent of banknotes in circulation as of March 31, 2023. This equates to around Rs 3.62 crore of cash banknotes.
While explaining the move, the Reserve Bank of India stated that the stock of other notes in different denominations remains “adequate” to meet the cash needs of the public.
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- What will happen now with the returned tickets?
- What happens with counterfeit or low-quality banknotes?
What will happen now with the returned tickets?
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The Reserve Bank of India will re-introduce its amazing Currency Verification and Processing System (CVPS) for the 2,000 end-of-life notes.
What the RBI will do with dismantled notes: Regarding the currency verification processing system The RBI has policies in place for disposing of notes that are no longer fit for circulation.
After being collected at the respective banks, the bills are deposited at the issuance offices of the Reserve Bank. The RBI checks currency notes to assess their validity after grouping and classifying them under the Currency Verification and Processing System (CVPS).
BCCL
Each CVPS system can process up to 60,000 cashier’s tickets per hour. CVPS counts bills and distinguishes between genuine and counterfeit cash bills. Shredding is used to destroy counterfeit banknotes.
However, there is a catch. Genuine banknotes that still had quality and useful life before being considered destroyed are shredded so that they can be recycled into new paper money.
This means that the paper required to create the 2,000 coin note will eventually end up in your pocket in a different denomination.
What happens with counterfeit or low-quality banknotes?
They are crushed and turned into briquettes. The Reserve Bank of India invites tenders for the sale of this type of briquettes for industrial use.
When India’s Prime Minister Narendra Modi announced the demonetization of around 89% of the country’s cash in circulation in 2016, the RBI’s state branch in Thiruvananthapuram in Kerala state sold it to The Western India Plywoods Limited , the only hardboard factory in India.
To generate hardboard, the facility in the Kannur area of the state apparently combines around 5% of the paper pulp created from these notes with 95% regular wood pulp.
Reuters
The Kannur factory reportedly received approximately 80 metric tons of shredded demonetized banknotes in the three weeks after demonetization was implemented on November 8, 2016.
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Source: vtt.edu.vn