India’s currency management system has had to absorb an extraordinary volume of damaged cash over the past three years, with Reserve Bank of India data showing that 62.13 billion notes were withdrawn from circulation between 2023-24 and 2025-26 after becoming worn out, torn or soiled beyond use. The figures illustrate a persistent and costly problem for the central bank, one that experts say is driven as much by careless public handling as by the sheer volume of cash circulating through India’s economy. With ₹500 notes bearing the brunt of the damage, the data has renewed attention on both citizen behaviour and the RBI’s longer-term plans to make Indian currency more durable.
A Three-Year Pattern of Rising and Falling Withdrawals
The RBI’s year-wise breakdown shows a clear peak in the middle of the period under review. During 2024-25, around 23.86 billion notes were pulled from circulation for being unfit to use, the highest annual figure across the three years. This followed 21.25 billion withdrawn notes in 2023-24, before the number eased to 17.02 billion in 2025-26.
Even with that decline in the most recent year, the cumulative scale remains striking. Sustained withdrawal at this volume forces banks and the RBI to continuously replace old currency, a process that consumes significant printing capacity and public expenditure year after year.
Denomination-wise data makes clear which notes are under the greatest strain. Around 21.30 billion ₹500 notes were withdrawn over the three years, the highest of any denomination, followed by more than 17.66 billion ₹100 notes. Lower-value notes were not spared either, with 6.52 billion ₹50 notes, 5.47 billion ₹10 notes, 5.40 billion ₹200 notes, 4.06 billion ₹20 notes and roughly 949.6 million ₹5 notes also withdrawn during the period.
Why High-Circulation Notes Wear Out Fastest
The pattern reflects a straightforward reality of cash usage. Notes that change hands most frequently, whether through large transactions in the case of ₹500 notes or everyday small purchases in the case of ₹10 and ₹100 notes, accumulate wear at a faster rate than less frequently used denominations.
This dynamic is not unique to the past three years. RBI’s own annual reporting has previously flagged the ₹500 note’s outsized share of currency in circulation by volume, alongside the ₹10 note, as a structural reason why these denominations dominate withdrawal figures year after year. The central bank’s broader currency management framework, known as the Clean Note Policy, exists specifically to address this churn by ensuring citizens receive usable, hygienic currency while systematically removing degraded notes from the system.
The financial burden of this constant replacement cycle is not trivial. RBI’s annual report for 2024-25 recorded a sharp rise in security printing expenditure, driven largely by higher print orders needed to keep pace with demand and replace notes lost to damage. This cost pressure has fed into the central bank’s renewed interest in polymer banknote trials, which promise substrates far more resistant to moisture, folding and tearing than conventional paper currency, potentially extending note lifespans several times over and reducing the frequency of costly reprints.
Handling Habits That Shorten a Note’s Working Life
Praveen Mishra, state vice-president of the All India Bank Officers’ Confederation, attributed much of the damage to everyday public negligence rather than manufacturing defects. He said writing names or phone numbers on notes, along with the use of staples, pins or tape, weakens the paper and causes notes to tear more easily.
Mishra added that habits such as repeatedly folding notes, carrying them for extended periods in overstuffed wallets, and handling currency with wet or oily hands significantly shorten their usable life, often to the point where notes become unfit before they even reach a bank branch for exchange. He recommended that citizens keep notes flat rather than folded, avoid writing on them entirely, and exchange damaged notes at a bank rather than continuing to circulate them informally in the market.
The RBI has continued its practice of withdrawing unfit currency and issuing fresh notes to maintain the overall quality of cash in circulation, a process that experts say could become considerably less expensive if public handling habits improve. As India weighs a shift toward more durable polymer notes in the years ahead, the interim message from currency management officials remains simple: how citizens treat the notes in their pockets has a direct bearing on how much the country ultimately spends replacing them.
