Banned notes used to fuel factory furnaces

A Chennai-based contractor has won a tender to collect these scrapped notes from the Reserve Bank of India, convert them into bricks and sell them to factories. 

“What we get is peanuts for the shredded currency. Our main idea is to get rid of the paper and not particular about the revenue through it,” a senior RBI official told DTNext. He, however, refused to give details regarding the amount of currency being shredded at the RBI facility in Chennai. 

It is learnt that the contractor, who had obtained the contract, pays around Rs 250 per metric tonne of shredded notes. The recycled currency bricks could fetch anywhere between Rs 6 to Rs 9 per kg. “These bricks are being supplied to factories to be used in furnaces. Factories mix them with firewood and it works out cheaper for the factories,” the RBI official said. 

After the demonetisation move, old currency notes to the tune of several crores have been sent to the RBI from other banks. 

Even before demonetisation, the RBI used to shred soiled currency at its facility in Chennai and sell them to the brick manufacturer. Earlier, more than Rs. 550 crore worth soiled currency notes used to be withdrawn  for shredding in Tamil Nadu every month. 

The contractor used to supply them to paper manufacturerswho then converted them into various products like paper weights, files, calendars and plywood. 

However, the production of shredded currency had gone up manifold following the demonetisation and the contractor has to now sell the briquettes to the factories. The supply has exceeded the demand from the recycled product industry.