This Is What Happened To The Old 500 & 1000 Rupee Notes After Demonetisation

The whole ruckus that happened when notes of 500 and 1000 notes were banned will remain unforgettable. People went crazy, because of course, the whole thing was uncalled for, making that event a huge mess for everyone.

Although the initial policy statement did mention lowering the quantity of cash in use in the Indian economy, describing demonetisation as a boost towards cashless transactions, which is how many people today justify the strategy, it was an anachronism.

It’s been a while since that incident, more than 5 years now. There were people endlessly working to get the matter solved, and normal people were lined up outside banks just to get their notes changed in exchange for getting new validated notes.

On the night of November 8, 2016, Prime Minister Narendra Modi depreciated all 500 and 1000 rupee notes.

But the main question, which still remains sort of a mystery, is, what did they do with the crores of demonetised notes that were returned? Did those get recycled? Or are they stored somewhere, with or without a case? Or is there a plan to create another ruckus sometime soon? We never know.

According to prior assertions by RBI executives, the demonetised banknotes retrieved from banks are encoded through a currency authentication and monitoring system that can distinguish between real and fake notes.

99.3% of the old currency were returned

In 2018, the Reserve Bank of India (RBI) reported that 99.3% of the notes had been repatriated to the central bank.

According to the Reserve Bank of India, there were 1,716.5 crore units of 500 and 685.8 crore units of 1,000 fiat currency on November 8, 2016, the day of the demonetisation announcement, totaling a tremendous sum of 15.44 lakh crore.

The Reserve Bank of India claimed in its financial report for 2016-17, announced on August 30th, 2017, that 15.28 lakh crore, or nearly 99.3% of the taken down notes, had reverted to the central bank.

Only 16,050 crores of the 15.44 lakh crore kept in previously taken down notes was not surrendered for the fiscal year ended June 30, 2017, according to the RBI.

What happened to demonetised 500 and 1000 notes?

After that, the demonetised currencies are shredded and turned into briquettes, which is truncated garbage chunks. Tenders are invited after it has been converted into lump charcoal. The briquettes are subsequently supplied to cardboard and paper producers.

The RBI receives old outlawed notes, which are shredded and transformed into composite waste blocks, which are subsequently sold to cardboard and paper manufacturers via tenders.

However, even after more than five years since this massive demonetisation operation, the debate on whether demonetisation was successful in capturing black money remains unresolved. At least that helped in creating a huge amount of manure for plants and increased the fertilisation rate of the ground a little bit.