New Delhi: The exchange of old 500 and 1000 rupee notes came to an end on the November 24, but Rs 500 old notes can be used till December 15 at petrol pumps and government utilities and deposited in banks till the end of that month. The big question that arises now is whether what happens to 500 and 1,000 rupee notes which were banned by Prime Minister Narendra Modi earlier this month to combat corruption and black money?
The demonetisation had a major effect on economy as the move sucked in 18 billion 500 and 1000 rupee notes which are valued at Rs. 14 lakh crore out of circulation. According to government sources the demonetised notes will be sent to Reserve Bank of India (RBI) so that it can be shred and pulped for recycling.
The stack of paper that will sent to RBI will be then turned in to short strips and after recycling it will be created into compressed blocks will be used to make office stationary. This method which is being used is completely a new method, earlier till 2001 old and discarded notes were destroyed by burning them.
According to information provided by sources to NDTV, RBI had started the process of preparing to deal with old notes days before PM Modi's announcement. In order to pulp the demonetised notes, a plywood company in Kerala's Kannur was shortlisted. A few gunny bags of shredded 500 and 1,000 rupee notes was then sent to the company for pulping.
The company hired for the pilot project has now signed a contract with the RBI to process 40 tons of shredded notes at Rs. 250 per ton. The briquettes that will be made out of pulping will be sold for industrial use via tenders. Each kilo of briquette will fetch about Rs.5 to 6.
Currency notes worth thousands of crores are taken out of circulation every month. The RBI regularly has been getting rid of soiled and damaged currency notes of different denominations. The central bank examines the notes and sorts them before disposing off currency that are not usable under verification and processing system.
