With the Rs 500 and 1,000 notes no longer legal tender, it would be interesting to find out what happens to the old notes. From today on wards the banks have started exchanging currency and it has been a hectic day so far. What happens to the Rs 500 and 1,000 notes? All the notes will be destroyed to such an extent that it can never be reconstructed.
Once the RBI receives the truck loads of notes from banks across the country, it would be shredded.
Then the notes would pass through a humidifier to convert them into briquettes. Later it would be given to contractors. It would be then used by the contractor for land filling. The RBI would however not undertake this exercise in one go. The process will undertaken several times as and when the notes from the banks across the country reach the RBI. In March 2016, there were 15,707 million Rs 500 notes and 6,326 million Rs 1,000 notes.