From Old Rupees to New Uses: How the RBI Recycles Demonetized Currency

From Hard Cash to Hardboard: How Old Rs 500 and 1000 Notes Are Being Recycled

Introduction to India's Demonetization Effort

As part of a major anti-corruption and black money crackdown, India's Reserve Bank of India (RBI) suddenly withdrew the old 500 and 1000 rupee notes from circulation. This abrupt move left the public grappling with the transition from cash to digital transactions and presented the RBI with a significant challenge in managing the volume of demobilized currency.

Devising Solutions for Recycled Notes

Given the vast quantities of old rupee notes in circulation, the RBI took a multifaceted approach to ensure that these notes would not simply go to waste. The notes were carefully processed to remove any vital security features, such as watermarks and serial numbers, and then put through rigorous destruction methods.

Shredding and Chemical Processing

The old notes are counted using CVPS machines, and any shortages or forgery issues are recorded before the notes are shredded to a state where only about 20% of the original paper remains. These shredded notes are then mixed with chemicals to be transformed into new paper or used as a base material for other applications. The central goal is to reuse the paper rather than simply incinerating it, thereby reducing environmental waste.

The Innovative Recycling Process

In an innovative move, the RBI in Kerala has partnered with the Western India Plywoods Limited, a factory in Kannur, to recycle these old notes into hardboards. This initiative not only conserves natural resources but also funds a valuable industry.

Partnering With Industry

The Western India Plywoods Limited, established in 1962, has become a part of this grand plan. Over the past few weeks, the factory has received 80 metric tonnes of shredded old notes. These notes are first converted into pulp and then blended with a mixture of about 5% paper pulp and 95% wood pulp to create hardboards. This sustainable approach provides a substantial input for the factory, which is known for producing high-quality hardboards.

Benefits of this Recycling Initiative

The recycling of old currency notes is not just beneficial from an environmental standpoint; it also helps the economy in several ways:

Resource Conservation: Using old currency notes to create hardboards minimizes paper waste and reduces demand for virgin wood pulp. Supporting Local Industry: By utilizing these recycled notes, the factory contributes to the local economy, creating jobs and supporting business growth. Enhancing Sustainability: This process significantly reduces the carbon footprint associated with paper production and waste disposal.

Conclusion

The RBI's approach to recycling demonetized notes, as exemplified in Kerala, showcases a thoughtful and sustainable solution to a complex problem. This initiative proves that even challenging economic transitions can bring about meaningful ecological and socio-economic benefits.

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