The demonetised Rs 500 and Rs 1,000 notes that have been counted and checked for genuineness are shredded and briquetted – compressed into bricks – and then discarded through a tendering process, the Reserve Bank of India said, PTI reported.
In its reply to a Right to Information query, the Reserve Bank reiterated that it is using the sophisticated Currency Verification and Processing machines to verify the numerical accuracy and genuineness of the demonetised notes. The notes are then put through the shredding and briquetting system and disposed of, but not recycled, it said.
On November 8, 2016, the government had declared Rs 500 and Rs 1,000 notes illegal tender in, what it had said then, was an effort to eradicate black money. However, a report released by the RBI on August 30, 2017, confirmed that demonetisation has been an economic failure, with very few benefits at a steep cost.
In the report, the RBI had said Rs 15.28 lakh crore, or more than 99% of the value of the currency that was scrapped, had returned to the banking system till June 30, 2017. It had said suspicious banking transactions rose by 3 lakh in 2016-’17 and high-value notes still make up two-thirds of the currency in circulation.
In February, the RBI said it is still processing the Rs 500 and Rs 1,000 notes that the government withdrew from circulation and did not give an expected date for when the process would be complete. The demonetised notes are “being processed for their arithmetical accuracy and genuineness, and reconciliation for the same is ongoing”, the central bank said. When asked for a deadline, it said that the processing is being done in an “expedited manner”.
The RBI has said in the past as well that it is still processing the notes, and it would take a long time. In September 2017, it said that it was using machines to process the notes “in two shifts”, but refused to disclose the number of personnel counting the demonetised notes.
After the Rs 500 and Rs 1,000 bills were taken out of circulation, the RBI issued Rs 2,000 notes, a new series of Rs 500 notes, Rs 200 bills and Rs 50 notes. The two high-denomination notes now make up more than 70% of all currency in circulation by value, according to RBI data.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!