Will RBI burn ₹2,000 notes or recycle them? Know what happens to old notes taken out of circulation

By: FPJ Web Desk | May 26, 2023

One of the reasons behind the withdrawal of Rs 2,000 notes from circulation is the Clean Note Policy, which aims to ensure that only good quality notes remain in your pockets instead of those prone to damage. Most Rs 2,000 notes we see were issued before 2017, and have reached the end of their 5-year lifespan.

As part of the Clean Note Policy launched in 1999, RBI used to visit markets and collect old, crumbled, torn notes, but this time it wants people to submit Rs 2,000 notes.

Once collected the notes will be sorted into relatively good ones and completely damaged ones with a Currency Verification and Processing device. Those which are still fit are kept to be cut in a way that they can be recycled to make new notes.

As for the ones which are considered unfit, they are shredded and compressed into small paper blocks, which are then auctioned off to be used as fuel for furnaces in factories.

This time, the Rs 2,000 notes are more likely to be shredded and the pieces from them may be used to make paper for new currency instead of turning them into briquettes, according to a Money Control report.