File photo. Photograph:( Reuters )
Demonetised Rs 500 and Rs 1,000 notes, which have been counted and processed for genuineness, are shredded and briquetted before being disposed of through a tendering process, the RBI has said.
The central bank had earlier estimated the value of old Rs 500 and Rs 1,000 notes received, as on June 30, 2017, at Rs 15.28 trillion.
While replying to Right-to-Information query, the Reserve Bank said that it is using the sophisticated Currency Verification and Processing machines to verify the numerical accuracy and genuineness of the demonetised notes. The notes are then put through the shredding and briquetting system and disposed of, but not recycled, it said.
Once compressed into bricks', the shredded notes disposed of through a tendering process, according to the reply.
On November 8, 2016, the government had announced Rs 500 and Rs 1,000 notes illegal tender in, what it had said then, was an effort to eradicate black money. However, a report released by the RBI on August 30, 2017, confirmed that demonetisation has been an economic failure, with very few benefits at a steep cost.
In the report, the RBI had said Rs 15.28 lakh crore, or more than 99% of the value of the currency that was scrapped, had returned to the banking system till June 30, 2017. The central bank said in the report, for the year ended June 30, 2017, that only Rs 16,050 crore of the Rs 15.44 lakh crore in old high denomination notes had not returned.
As on November 8, 2016, there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 notes in circulation, totalling Rs 15.44 lakh crore, it had said.
At least 59 sophisticated Currency Verification and Processing (CVPS) machines are in operation in various branches of RBI across the country to process demonetised notes for their arithmetical accuracy and genuineness.