What will the government do of all the 500, 1000 notes they are collecting?

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They will be turned into bricks!

For that matter, all notes that are not fit for use anymore (called “soiled notes”) are turned into bricks.

The withdrawn currency of 500/1000 denominations would also be treated as soiled notes, no matter how new they are. (In fact, there would be hundreds of completely unopened boxes of new notes of these denominations too. Unfortunately, they too would meet the same fate)

When soiled notes are deposited/exchanged for in the bank branches, they are sent to the Reserve Bank of India. At the Reserve Bank of India, these notes are made to go through a machine called CVPS (Currency Verification & Processing System) which segregates the notes into soiled, fit for re-use, counterfeit and rejected.

Soiled notes are automatically forwarded by the CVPS to the Shredding & Briquetting System where the notes are shredded and condensed to form palm-sized cylindrical bricks like this:

These briquettes are then given away to some nearby factories to be used along with fuel in their furnaces.

Maruthi Prasad

I'm Maruthi Prasad,a self made entrepreneur.Founded TechnoSymbol.com and WeAreJobSeekers.com .And also I am a web designer & web developer based in Bangalore,India.

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