After assisting the government in printing and transporting new currency notes, the army will now help with the disposal of old notes that went back to the banks after demonetisation.
According to army sources, the government has asked for "15 teams from the army for currency verification". However, the official did not reveal the exact number of soldiers to be involved in the task.
It was also not clear what method of disposal was to be used.
"The deployments will be completed by May 26," an official said.
The official denied that army soldiers were to guard the Reserve Bank of India (RBI).
According to information provided by government in a written reply to Lok Sabha, on the day demonetisation was announced, there was around Rs 8,58,253 crore in currency notes of Rs 500 and Rs 6,85,782 crore in Rs 1,000 notes.
While the RBI has not released any figure on how much of the old currency notes have come back to the banks, it is estimated that around Rs 15 lakh crore has been returned. This is around 95 per cent of the old Rs 500 and Rs 1,000 notes that were in circulation.
Post-demonetisation, as new notes of Rs 500 and Rs 2,000 were printed, the Indian Army was called to assist at the bank note printing presses due to shortage of personnel to man the facilities round the clock.
Indian Air Force had transported over 600 tonnes of new currency after demonetisation, using its C-130s and C-17 aircraft.
On November 8, 2016, Prime Minister Narendra Modi had announced the spiking of higher value notes of Rs 500 and Rs 1,000.