Why the Government's recycling effort post demonetization should be applauded
Karan Thakkar
Your Sustainability Partner, Recycler, Shaping Indias E-Waste Management, Circular Economy Scenario
The demonetization of old 500 and 1000 rupee notes came as quite a shock to all of us, but the RBI had been preparing for it in full swing to ensure smooth implementation of the operation. Since the 8th of November, the whole country has been up and about exchanging old cash notes and standing in long queues to get new ones. Around 18 billion 500 and 1000 rupee notes, amounting to 14 lakh crore rupees have been sucked out of circulation since the announcement was made.
The question that we have is, what does the government plan to do with all the old 500 and 1000 rupee notes?
Up till 2001, all old notes were incinerated without much examination. This was a highly inefficient method which also caused pollution. Since then, like in many other countries, the notes have been recycled, which is an environment-friendly measure to dispose of with old cash.
All notes will be deposited at RBI Issue offices. The notes will then be checked under Currency Verification and Processing System (CVPS), so as to separate the real and fake notes. The CVPS was started by RBI governor Bimal Jalan for faster and secured processing of soiled currency notes. It counts notes and examines if the notes are genuine. The fit notes are cut in a manner that will allow them to be recycled into new notes and the unfit notes and shredded.
A plywood company in Kannur was shortlisted by the RBI days before the demonetization to process the shredded notes and a contract has been signed with the RBI to process 40 tons of shredded notes at Rs. 250 per ton. The shredded notes are converted to briquettes weighing about 100 grams which are then sold for industrial use via tenders. The notes are also recycled into products including calendars, paperweights, files, and various other products. The measures taken by the government to ensure the safe and environmentally friendly recycling of old currency are most definitely commendable and praiseworthy.
The process used is similar to that used in the USA, where unfit notes are shredded and sent to landfills.
An interesting fact to be noted is that India is one of the producers and consumers of currency notes! This is due to the large number of cash transactions that occur offline. Through the whole demonetization mission, the government also hopes to get people to use cashless methods of money transactions whenever possible. India is moving towards a digital economy and demonetization on old 500 and 1000 notes was a huge step towards it.
Sources:
https://www.bemoneyaware.com/blog/rbi-banned-old-notes-destroyed/
https://www.ndtv.com/india-news/what-rbi-will-do-with-18-billion-500-and-1000-rupee-notes-1632001