On November 8, 2016, Prime Minister Narendra Modi sent shockwaves across the nation by suddenly announcing the demonetisation of Rs 500 and Rs 1000 currency notes.
After the PM’s announcement, the process of exchange of notes started and people deposited their old Rs 500 and Rs 100 notes in the bank and got new notes. Five years down the line, let us know what happened to those old notes that were deposited.Â
After demonetisation, old Rs 500 and Rs 1000 currency notes were deposited under the Reserve Bank of India (RBI)’s supervision. Instead, new notes of equal value were given to people and today new 500 and 2000 notes are in circulation, as well as new notes of 20, 100 and 50. During demonetisation, old notes worth more than Rs 15 lakh crore were deposited and those notes are not even in circulation today.Â
In 2017, an RTI response revealed that the dissolution of demonetised notes was done. These notes were not brought back to the market and their paper is used to make other goods. The notes that have been discontinued as per RBI rules are dissolved under the Currency Verification Processing System (CVPS). Notes out of circulation are first divided into different categories and then decided on their use.
It is first seen whether the currency can be scrapped or not, after which the clippings of these notes are converted into BRICS. These BRICS, prepared from note clippings, produce a variety of cardboard items. Students of Ahmedabad’s National Institute of Design (NID) had made many things out of old 500 and 1000 notes. In fact, RBI had sought NID’s help for the work, after which students prepared everyday items such as pillows, table lamps from note clippings.
According to the information, RBI does not recycle old notes i.e. those notes are not reintroduced after closure. The speciality of old notes is that they do not completely dissolve in water nor leave colour. In such cases, they can be used to make other paper items.
