Soiled note disposal by RBI falls sharply in FY26 due to machine upgrades
June 02, 2026
The central bank disposed of 17 billion soiled and mutilated banknotes in FY26, down from 22.9 billion a year earlier, as replacement of shredding systems disrupted processing operations
According to the latest data, the central bank disposed of 17 billion pieces of soiled or mutilated notes in FY26, compared with 22.9 billion pieces in the previous financial year.
This was mainly due to the replacement of Shredding and Briquetting Systems (SBS), which interrupted the disposal of soiled banknotes. Sources said the replacement and installation of such machines usually take four to five months. During this period, the operation of SBS and Currency Verification and Processing Systems (CVPS) machines remained suspended.
The RBI’s annual report noted that the upgradation of banknote-processing infrastructure at the Reserve Bank’s Issue Offices continued with the installation of new SBS machines.
“The disposal of soiled banknotes during 2025-26 has been lower than that of the previous year on account of transient interruptions arising from the replacement of Shredding and Briquetting Systems (SBS) at Issue Offices of the Reserve Bank,” the annual report for FY26 said.
The augmentation of cash-processing infrastructure through the procurement of new Currency Verification and Processing Systems (CVPS) is also underway.
This was mainly due to the replacement of Shredding and Briquetting Systems (SBS), which interrupted the disposal of soiled banknotes. Sources said the replacement and installation of such machines usually take four to five months. During this period, the operation of SBS and Currency Verification and Processing Systems (CVPS) machines remained suspended.
The RBI’s annual report noted that the upgradation of banknote-processing infrastructure at the Reserve Bank’s Issue Offices continued with the installation of new SBS machines.
“The disposal of soiled banknotes during 2025-26 has been lower than that of the previous year on account of transient interruptions arising from the replacement of Shredding and Briquetting Systems (SBS) at Issue Offices of the Reserve Bank,” the annual report for FY26 said.
The augmentation of cash-processing infrastructure through the procurement of new Currency Verification and Processing Systems (CVPS) is also underway.