Notes classified in ineligible slots used to be burnt earlier but this has been stopped due to air pollution.
After all notes are collected and sent to RBI, they will be verified using CVPS (Currency Verification and Processing System).
We know that Rs 2000 notes are being phased out and we have till September 30 to exchange or deposit them in the bank. The notes will continue to be legal tender till date and may remain so even after the expiry date. The deadline may possibly be extended. If the notes are collected by the bank, will the notes be treated as junk or will RBI make some use for them?
After all notes are collected and sent to RBI, they will be verified using CVPS (Currency Verification and Processing System). In an hour, a CVPS system can handle 50,000 to 60,000 notes. These devices count the currency and determine whether it is genuine. It then separates the notes into groups that fit and don’t fit. Paper shredders are used to shred inappropriate notes. Additionally, the conforming notes are shredded so that they can be recycled to create new currency notes.
Notes classified in inappropriate slots used to be burnt earlier but this has been stopped due to the resulting air pollution. Instead, these notes, after being shredded, are sent to the briquetting system where they are processed into briquettes. Industrial furnaces can use these briquettes. In addition, they are used in the production of paper boards.
RBI invites tenders for the sale of these briquettes In 2016, when the 500 and 1000 notes were out of circulation due to demonetisation, the scrap notes were sold to Western India Plywoods Limited. According to the RBI’s annual report for 2021-22, 1878.01 crore notes were destroyed this year, which is 88.4 percent higher than in 2020-21.
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