demonetisation, your role, flip-flops, secrecy: Parliament panel
to RBI Governor Urjit Patel
January 09, 2017
Urjit Patel to
appear before PAC on January 28, list of 10 questions sent
THE PUBLIC Accounts Committee (PAC) headed by senior Congress
leader K V Thomas, which has asked Reserve Bank of India (RBI)
Governor Urjit Patel to appear before it on January 28, has
asked him 10 probing questions on the demonetisation issue —
from the decision-making process to the level of RBI’s
involvement, impact on the economy, and “flip-flops” in RBI
regulations over the last two months.
In the questionnaire
sent on December 30, accessed by The Sunday Express, the
parliamentary panel has asked the RBI Governor why he should not
be prosecuted and removed for “abuse of power of office” if
there are no laws that impose restrictions on withdrawal of
cash. The PAC has also sought to know how much of the currency
was demonetised, and how much has returned into the banking
The list of
Q.Union Minister Piyush Goyal has said on the floor of
the House that the decision to demonetise was taken by the RBI
and its Board. The government merely acted upon this advice. Do
Q. If the decision was indeed RBI’s, then when exactly
did the RBI decide that it was in India’s best interests to
Q. What was the exact rationale laid out by the RBI for this
decision to invalidate Rs 500 and Rs 1,000 notes overnight?
Q. RBI’s own estimates show fake/ counterfeit currency to
be a mere Rs 500 crore. India’s cash to GDP was 12%, lower than
Japan (18%) and Switzerland (13%). High denomination notes as a
share of currency was 86% in India, but 90% in China and 81% in
US. So, what was so alarming that the RBI decided India needed
to demonetise suddenly?
Q. When was the notice sent to the RBI Board members
calling for an emergency meeting on November 8? Which of them
attended this meeting? How long the meeting did last? And where
are the minutes of this meeting?
Q. In the subsequent note sent to the Cabinet
recommending demonetisation, did the RBI explicitly mention that
this decision would mean invalidating 86 per cent of the
country’s currency and its attendant cost? How long did the RBI
say it would take to remonetise?
Q. The RBI notification of November 8, 2016 under Section
3 c(v) issued a restriction on withdrawal from a bank account
over the counter to Rs 10,000 per day and Rs 20,000 per week.
There was a similar limit of Rs 2,000 per day in an ATM. Under
what law and powers of the RBI, were these limitations imposed
on people to withdraw their own cash? What gave the powers to
the RBI to ration currency notes in the country? If there are no
laws that you can cite, why should you not be prosecuted and
removed for abuse of power of office?
Q. Why have
there been so many flip-flops in RBI regulations over the past
two months? Please give us the name of the RBI officer who came
up with the idea to ink people for withdrawal? Who drafted the
notification on marriage related withdrawal? If it was not the
RBI that drafted these but the government, is the RBI now a
department of Ministry of Finance?
Q. How much
exactly was demonetised and how much has been deposited back in
old currency? What was the expectation of notes to be
extinguished when the RBI advised the government to demonetise
on November 8?
Q. Why has
the RBI refused to reveal information under the RTI, citing
inane reasons such as fear of personal injury? Why is the RBI
not providing information under RTI to queries that come?
On Friday, the Rajya Sabha Standing Committee on Subordinate
Legislation also questioned Patel as well as RBI Deputy
Governors N S Vishwanathan and R Gandhi on demonetisation.
According to sources, JD(U) member Ali Anwar Ansari asked if RBI
was informed in advance about the demonetisation decision.
Stating that not taking steps to avoid inconvenience to people
amounted to “criminal negligence”, he said it was all the more
dangerous if RBI was not consulted in time.
“We raised issues about demonetisation and how they coped with
it… the impact, problems in implementation, problems faced by
the banking sector and how to fix all that… Many questions did
not get addressed,” said a source who attended the meeting.
“The members also asked how the demonetisation decision was
taken on November 8. It was a constructive dialogue… We asked
probing questions,” said a member of the panel.
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