Talks With Government On Demonetisation Began In Early 2016: RBI Governor

Reserve Bank of India Governor Urjit Patel is learnt to have told a parliamentary panel that discussions between the central bank and the government on demonetisation began early last year.

Congress members of the committee asked questions like whose decision was it to withdraw high-value currency notes and also about RBI’s autonomy, according to people familiar with the matter who did not wish to be identified.

BJP members of the panel, headed by Congress leader Veerappa Moily, chose not to raise too many questions during the meeting, they said.

The questions put up by the panel ranged from the amount of old currency that came back after demonetisation to the total amount of new bills of Rs 500 and Rs 2,000 that were printed and sent to banks. It is also learnt that former Prime Minister Manmohan Singh, one of the members who had described demonetisation as monumental management failure, too raised questions on the issue.

The people quoted above said Patel told the Parliamentary standing committee on finance that discussions between the central bank and the government were taking place since early last year.

TMC’s Saugata Roy, another member of the committee, said RBI officials remained defensive in their reply but another meeting is scheduled for January 20 when Patel will appear before the Public Accounts Committee of Parliament on the same issue.

The finance ministry has sought time from the panel to provide answers to the queries raised during the meeting in which the finance secretary made a presentation before the committee, the sources said, adding that the members seemed not too satisfied with the replies. The crucial meeting was held to discuss the "demonetisation of Indian currency notes of Rs 500 and Rs 1,000 and the impact thereof".