Public and private-sector banks across the country are receiving massive amounts of junked bank notes in the form of Rs 500 and Rs 1000, that were demonetised by the government on November 8 in a bid to flush out black money. The government has set December 30 as the date till which people can exchange the old bills, that formed 86 per cent of the currency in circulation in the country. The government has maintained that even though the move was planned several months ago in conjunction with the Reserve Bank of India, it had to be kept a secret so as not to tip off black money hoarders. While the old bills have been replaced by new notes of Rs 500 and Rs 2000 with higher security features, there are many who wonder what happens to the junked notes, which are piling up at banks.
Five things to know about the junked notes:
* A Bloomberg report says as many as 23 billion notes, in denominations of Rs 500 and Rs 1000, are likely to be received by banks across India.
* If stacked one on top of the other, the currency notes would literally create a pile that would be 300 times as high as Mount Everest, the planet’s highest mountain range whose peak stands at 8,848 metres above sea level.
* The Bloomberg report quotes an official of the Reserve Bank of India saying the now-worthless notes could be destroyed by dumping in landfills or even turned into briquettes (combustible material used to start fires in industries and factories).
* Rs 15 lakh crore is the amount that was purportedly withdrawn by the Narendra Modi government in the form of the now-recalled bank notes. While the process to deposit the old bank notes is ongoing, multiple reports say Rs 6 lakh crore will be deposited in bank accounts. A major chunk of the money, estimated to be Rs 5 lakh crore, will remain undeclared as it could have been bought through illegitimate means.
* The Bloomberg report says the $27 billion global bank note industry is dominated by Asian countries with Europe coming in second and Africa-Middle East region in the third position. India, with a population of 1.25 billion people, reportedly accounts for 1.5% of the global industry with the Reserve Bank spending almost $400 million every year in the production of currency.