New Delhi: An RTI query has revealed that the Centre went ahead with demonetisation even before the RBI central board could formally approve it. (Also read: LS Polls a Contest Between PM Modi, Coalition of Rivals: Jaitley)
It said that though the Urjit Patel-led RBI board had met just two-and-a-half hours before Prime Minister Modi’s announcement on November 8 2016, the minutes of the meeting were signed by the RBI Governor five weeks later, on December 15, 2016.
The minutes of the meeting were presented before the media by Congress spokesperson Jairam Ramesh who said they were obtained through a Right to Information query by an activist.
The RBI board, which included current Governor Shaktikanta Das as a director, had also reportedly said that demonetisation would not have any material impact on tackling the black money menace or counterfeit currency — the reasons given by the PM while announcing the move.
In its annual report for 2017-18, the RBI said that nearly all the money that was withdrawn returned to the banking system. “It is a commendable measure but will have short-term negative effect on GDP for the current year. Most of the black money is held not in the form of cash but in the form of assets such as gold or real estate and that this move would not have a material impact on those assets,” as per the minutes posted by RTI activist Venkatesh Nayak on the website of Commonwealth Human Rights Initiative.
In another reply, the RBI has also revealed it had no data on the old Rs 500 and Rs 1,000 notes used to pay for utility bills such as fuel at petrol pumps — payments that are anonymous and are believed to have formed a good part of the demonetised currency that returned to the banking system.
Meanwhile, the Congress spokesperson said that the RBI board had backed the move as it was “pressured” by the Government. He said if the Congress came to power, all abnormal flows from legitimate tax havens and abnormal deposits in cooperative banks would be probed.
“Most of the black money is not held in the form of cash, but in the form of real sector assets such as gold or real estate and that this move would not have a material impact on those assets,” an observation by the RBI board of directors was quoted by Ramesh.
“While any incidence of counterfeiting is a concern, Rs 400 crore as a percentage of the total quantum of currency in circulation in the country is not very significant,” the board had said, according to Ramesh. (With PTI inputs)