India: 13,852 Million Banknotes 'Destroyed' in 2010-11

[Bimat]

RBI destroyed notes worth Rs 1.8L cr in '10-11

Hemali Chhapia & Partha Sinha, TNN | Nov 7, 2011, 03.07AM IST

MUMBAI: Ever wondered where all the torn, tattered, battered notes we try to get rid of eventually land up? Not in the taxi driver's pocket or the bhajiwala's purse. They are brutally destroyed, shredded to waste-an environmentally responsible shift from the earlier times when the Reserve Bank of India burned sullied notes. This is not some petty change we are referring to, not even some cupboards-full; the number of notes that are shredded each year in India could fill large rooms, feed a thousand stomachs or educate lakhs of children.

Data procured by RTI activist Manoranjan Roy shows that between 2001 and now, 11,661 crore notes lost their usable value and were shredded to bits, to be later balled or gummed together, and be reborn as coasters, pen stands, paper-weights or key-chains that hold keys to chests with more money. In 2010-11 alone, 1,385 crore notes valued at Rs 1,78,830 crore were destroyed. Roy, who filed the RTI said, "While the RBI has scrapped so many notes, they must ensure that notes that have lower denominations must be widely available."

The RBI public relations officer said that 26 offices across the country are equipped with machinery to destroy notes. "The small denomination notes have a life of about six months as they are constantly circulated and they change a lot of hands. In fact from that came the idea of coining Rs 10," said Alpana Killawala, chief general manager, department of communication.

Although the share of small denomination notes in the total circulation is very high, in terms of value they constitute a very small percentage, say experts. The average life of these banknotes is less than a year. "The cost of printing and servicing these banknotes is thus not commensurate with their life. Printing of these banknotes is discontinued over time and these denominations are coined."

At the other end, Rs 1,000 bills live longer, for many are not even used and they remain ensconced in wallets of the holder for months. Those who study spending psychology said that several people fold up a couple of Rs 1,000 notes and place them in a secret purse pocket for a rainy day. Some others don't spend it because of the sentimental value attached to it, as also because new notes of higher denomination are considered to be more auspicious. So despite the fact that the 1000-rupee bill came into being in November 2000, very few notes have had to be scrapped, despite the uniform paper quality of all notes.

After freshly minted crisp bills journey around, and finally make it to the soiled notes drop box, they are checked for their genuineness, before they are shredded. Yes, there is a thing as no-one's money.

ONCE UPON A NOTE

Denomination ------ Notes Destroyed (million pieces)

----------------------- 2008-09 -----2009-10 -------- 2010-11

Rs 1,000 --------- 39 ----------------- 78 ----------------- 179

Rs 500 ----------- 735 -------------- 1,247 --------------- 1,864

Rs 100 ----------- 3,690 ------------ 4,307 --------------- 5,227

Rs 50 ------------ 2,403 ------------- 2,400 -------------- 2,095

Rs 20 ------------ 1,003 ------------- 790 --------------- 664

Rs 10 ----------- 3,700 -------------- 3,832 ------------- 3,657

Up to Rs 5 ---- 392 --------------- 418 ---------------- 166

Total -------- 11,962 ------------ 13,072 ------------- 13,852

(Source: RBI)

Table:

Year ----- Number of notes destroyed (in crore)

2001-02 ------- 1,060

2002-03 ------- 1,560

2003-04 ------- 1,245

2004-05 ------- 1,175

2005-06 ------- 930

2006-07 ------- 733

2007-08 ------- 1,070

2008-09 ------- 1,196

2009-10 ------- 1,307

2010-11 ------- 1,385

Total ----------- 11,661

(Source: RTI)

Source: Times of India

[Md. Shariful Islam]

Statistics of destroyed currencies have to be compared with new issued currencies. Double digit inflation of India represents the fact that the new issue is higher than withdrawals. If so, then destroying torned currencies are not an act to rebuke. Because those currencies face trouble to change hands as they have less acceptance.

Islam

[Bimat]

Statistics of destroyed currencies have to be compared with new issued currencies. Double digit inflation of India represents the fact that the new issue is higher than withdrawals. If so, then destroying torned currencies are not an act to rebuke. Because those currencies face trouble to change hands as they have less acceptance.

Well, RBI never discloses how many new banknotes of each denomination are issued (or are planned to be issued in a particular year). I don't think one can use RTI (Right to Information) to get that information (we can't use it for mintage of coins either)...

Aditya

[Figleaf]

Here is a way to have some fun with shredded banknotes. This little plastic bag contains the earthly remains of banknotes with a value of around DM 1500. Interesting thought. All you need to do puzzle them together again

Peter

[Bimat]

Here is a way to have some fun with shredded banknotes. This little plastic bag contains the earthly remains of banknotes with a value of around DM 1500. Interesting thought. All you need to do puzzle them together again

That's a tough challenge!

Aditya