RBI Guv mum on scrapped notes with banks

Tribune News Service

New Delhi, January 18

Appearing before a parliamentary panel headed by senior Congress leader Veerappa Moily, Reserve Bank of India (RBI) Governor Urjit Patel today did not give the exact number of scrapped high denomination notes that had come back to the banking system.

Sources said the Governor told the Standing Committee on Finance that new currency worth Rs 9-9.2 lakh crore had been printed by the central bank and put back into circulation. Congress MP Digvijaya Singh sought to know a date when the restrictions on cash withdrawals would be lifted and the final figure on the notes returned, but did not get a “satisfactory” response.

The panel had called the RBI and Finance Ministry officials to discuss the “demonetisation of Indian currency notes of Rs 500 and Rs 1,000 and the impact thereof”. Sources said Patel did not reply when asked how much of the scrapped notes have been returned to the banks as the central bank was still in the process of counting these.

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The RBI had earlier this month said that the process of reconciling the accounting entries with the physical cash balance was on and that “firm” figures on the notes returned would be released at an early date. 

Patel reportedly told the committee that it was the Union Government that had requested the RBI to take the decision on demonetisation and that discussions on banning the Rs 500 and Rs 1,000 notes  had begun as early as January last year.

A senior Opposition MP said Patel could not answer two questions — how much money had been deposited in the banks and how much time it would take for the situation to turn normal.

A ruling party MP said facts already in the public domain were highlighted during the presentation with the RBI Governor elaborating on the arrangements made by the central bank to undertake the mammoth demonetisation exercise. 

Patel was summoned days after the United Forum of Reserve Bank Officers and Employees wrote to the RBI Governor, alleging that the image of the central bank had been dented beyond repair. Objecting to the government “impinging on RBI autonomy”, the unions had asked Patel to take action against the “unwarranted interference”. The Finance Ministry was quick to react, saying the government “fully respects the independence and autonomy of the RBI”.