The 500 rupee and 1000 rupee notes we now have in our possession are now pieces of pretty, worthless paper; having about the same value as the Gandhiji pictures that poor PK was collecting in the movie of the same name. So what happens to the demonetised currently notes that have now been declared worthless?
At the stroke of midnight a few days ago, these notes were transformed from legal tender able to buy valuable goods and services into worthless pieces of paper. Earlier, finding a 500 or 1000 note tucked away in a forgotten pocket or found lying on the ground would be a bit of a windfall; not so now.
Right now crowds inside banks, endless queues outside banks, ATMs and post offices demonstrate desperate citizens surrendering their useless 500s and 1000s, and trading them in for useable currency.
According to estimates, there are about 15,707 million Rs 500 notes and approximately of 6,326 million Rs 1,000 notes in circulation. According to an unidentified official, the demonetised notes are shredded and then passed through a humidifier to mould them into briquettes. These are then picked up by landfill contractors. In other words, it is literally a case of cash into trash.
Currency notes are also seized by the police in raids and as a result of criminal investigations. So what about the victims of robberies? How will they be reimbursed for those demonetised notes? Right now, the police have no directives; in other words we have no idea what will happen to the seized notes.
These boys may have lit this ‘bonfire’ just as a lark, but there are reports of people resorting to actually burning currency notes. In Bareilly, remnants of stacks of burnt notes were found.
There have also been reports of notes being cut up and torn. Notes of 500 and 1000 rupees are also stuffed into gunny bags and dumped. Remnants of these have also been discovered.
When currency is taken out of circulation, it is usually done in small amounts or is done when currency is unfit for use. In the United States, unfit currency is sometimes transformed into souvenirs such as the picture above. Sometimes the shredded currency is used for artistic or commercial purposes.
The central bank of Hungary transformed old notes into fuel. Shredded bank notes were turned into briquettes and then burned in a furnace. These were used to heat facilities that looked after handicapped kids and for other underprivilaged groups.
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