To make banknote disposal more environment-friendly, the Reserve Bank will use shredded banknotes for making particle boards and has started a process to empanel board manufacturers, according to its annual report released on Thursday.
In its report, the RBI said the quantum of banknote briquettes or compressed blocks of paper produced annually in India has hovered around 15,000 tonnes, and it has been on the lookout for greener alternatives for disposal.
Conventionally, a majority of central banks and other authorities in charge of currency management dispose of shredded banknotes in landfills or through incineration, which is not environmentally friendly.
The RBI commissioned a study by the Institute of Wood Science and Technology, an autonomous body under the Union Ministry of Environment, Forest and Climate Change, to look for some alternative solutions, the report said.
“The study established that particle boards created with currency briquette particles would conform to the technical requirements of particle board,” the annual report said.
It has initiated a process for empanelment of particle board manufacturers who will procure briquettes for end use as partial replacement of wood particles in their boards, the annual report said.
The Department of Currency Management will “actively pursue” its initiatives towards finding more environment-friendly ways for disposal of banknote shred/briquettes, it added.
The report said ingredients embedded in banknote paper substrate such as security threads and fibres, security inks and other chemicals used in banknote printing lead to an environmental impact, and hence the disposable has to be made more sustainable and eco-friendly.
India poised to remain fastest growing major economy in FY26: RBI
The country is poised to remain the fastest growing major economy in the world even in FY26, the Reserve Bank said on Thursday.
The benign inflation outlook and a “moderation” in GDP expansion warrant the monetary policy to be supportive of growth going forward, the RBI said in its annual report.
“…the Indian economy is poised to remain the fastest-growing major economy in 2025-26 by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth,” the RBI said in the latest report.
It flagged global financial market volatility, geopolitical tensions, trade fragmentation, supply-chain disruptions and climate-induced uncertainties as factors posing downside risks to the growth outlook and also upside risks to the inflation outlook.
However, factors like easing of supply-chain pressures, softening global commodity prices and higher agricultural production on above-normal south west monsoon augur well for inflation outlook, the central bank said.
Shifts in tariff policies may result in sporadic episodes of volatility in financial markets, it said, adding that exports may encounter headwinds on “inward-looking policies and tariff-wars”.
The trade pacts being signed and negotiated by India will help ensure that the impact is limited, the RBI said, adding that services exports and inward remittances will help ensure that the current account deficit is “eminently manageable” in the new fiscal.
The RBI, which has already lowered key policy rates in two consecutive reviews, said in the annual report that there is now a “greater confidence” on durable alignment of headline inflation to the 4 per cent target over a 12-month horizon.
Considering the dynamic nature of the interest rate risk, banks need to address both trading and banking book risks, especially in light of moderation in net interest margins, it recommended.