Demonetisation: RBI Guv likely to appear before Parl panel

RSTV Bureau
File photo of RBI Governor Urjit Patel  Photo - PTI

File photo of RBI Governor Urjit Patel
Photo – PTI

RBI Governor Urjit Patel is likely to appear before a Standing Committee of Finance, a parliamentary panel, later today to issue clarifications regarding currency demonetisation that took place on November 8, 2016.

Patel had earlier sought two exemptions from appearing before the committee, which was looking into the issue of demonetisation.

Members of the panel look to ask Patel the real reason why currency notes of ₹ 500 and ₹ 1000 were made invalid on November 8, 2016. Patel will probably also have to answer questions regarding RBI’s preparedness for digital transitions post demonetisation. And how much money came back into the system after the process. He is also expected to give details of how demonetisation was carried out.

On January 18, Standing Committee on Finance, headed by Congress MP Verappa Moily had questioned Patel on the issue. As the members were unable to clarify all queries, they decided to call Patel and also top finance ministry officials again to discuss the impact of demonetisation.

Earlier, Patel was set to appear before the panel on May 25 and June 8 but he cited other engagements and exempted himself.

When Patel appeared before the panel on Jaunary 18, he is believed to have said that discussions on demonetisation between the central bank and the government began in early 2016.

On November 8, 2016 Prime Minister Narendra Modi had announced the demonetisation of high denomination currency notes of ₹ 500 and ₹ 1000. PM Modi had said it was a move to drastically cut out black money in the system. But, the Opposition alleged that the measure caused  major “inconvenience” to the people.

Finance Minister Arun Jaitley had also said in Parliament during the last Budget Session earlier this year, that the Reserve Bank of India had on its own made a ‘recommendation’ to carry out demonetisation of high value notes.

“The RBI board met and independently applied its mind and made a recommendation to demonetise Rs 500 and Rs 100 notes…Because the decision had to be kept in utmost secrecy, it was not made public,” Jaitley had said.