RBI took call on note ban, FM tells Rajya Sabha

Raj Kamal Rao

Responding to query during the Question Hour in Rajya Sabha on Tuesday, Finance Minister and Leader of the House in Rajya Sabha Arun Jaitley said that the Reserve Bank of India on its own made a ‘recommendation’ to demonetise high-value currency.

Leader of the House in the Rajya Sabha speaking on cyclone Vardah on Dec 14, 2016.

Leader of the House in the Rajya Sabha speaking on cyclone Vardah on Dec 14, 2016.

When Trinamool Congress Member Sukhendu Shekhar Roy asked the Finance Minister, whether government received any recommendation from RBI to demonetise high denomination currency or whether the RBI was asked by the government to send any recommendations?

“The RBI board met and independently applied its mind and made a recommendation to demonetise Rs 500 and Rs 100 notes,” said the Finance Minister.

Earlier, Congress Member Shantaram Naik asked the Finance Minister, whether any meeting of Central Board of the Reserve Bank of India had taken place and any analysis of effects of demonetisation was discussed?

FILE: Mumbai: People stand in long queues outside a bank to exchange their old Rs 500 and 1000 notes in Bhiwandi, Mumbai in Wednesday, Nov 16, 2016. Photo - PTI

FILE: Mumbai: People stand in long queues outside a bank to exchange their old Rs 500 and 1000 notes in Bhiwandi, Mumbai in Wednesday, Nov 16, 2016.
Photo – PTI

Jaitley said that the formal resolution of RBI Central Board was passed on November 8th and Union Cabinet took the decision.

He also said that the consultations on demonetisation started in Feb 2016 itself, in May 2016 RBI board had decided to go in for a decision of high denomination currency and approved a design,”

“Because the decision had to be kept in utmost secrecy, it was not made public” he added.