- Banned notes will be put through a machine called, Currency Verification & Processing System (CVPS).
- This system can process 50,000 to 60,000 banknotes in an hour.
- Earlier soiled banknotes or unfit to use notes were burned by RBI.
Ever since the demonetisation announcement, the common men of India is seen standing in queues to exchange the banned notes and to withdraw the new currency note.
The demonetisation announcement made 86% of the total money in circulation invalid. In terms of value, around ₹14.18 lakh crore rupee is invalid, according to the annual report of Reserve Bank of India (RBI) on 31 March 2016.
Now the question is, how or what is the process of disposing of the banned currency which, in this case, is a massive amount of banknotes.
To dispose of soiled notes means banknotes deemed unfit to use, there is an established procedure to be followed.
The banned banknotes that we have deposited/exchanged in various bank branches will be sent to Issue offices of the Reserve Bank of India (RBI) where they will be put through a machine called, Currency Verification & Processing System (CVPS).
This system was introduced in the year 2003 by the former RBI governor Bimal Jalan, and each of the machines under this system can process 50,000 to 60,000 banknotes in an hour. The system counts, checks the genuineness and sort out the banknotes as fit and unfit and destroys the unfit notes by shredding.
The shreds are then sent to a briquetting system that compresses it into briquettes or cylindrical blocks of small size. Earlier, the process was to burn the soiled notes which was not at all environment-friendly, but the current method is environment-friendly.
The compressed briquettes are through tenders to factories where they are used as residual fuel in industrial furnaces and also used for land fillings and making different items for offices, homes, and paperboard use.
At the present situation, a RBI official confirmed that they are ready for disposing of the banned notes.
Last Updated 31, Mar 2018, 6:48 PM IST