New notes worth Rs 9.2 lakh cr issued, note ban talks begin last Jan

He told the panel that talks with govt on demonetisation began early last year

The Reserve Bank of India has injected Rs 9.2 lakh cr ($135.21 billion) worth of new currency notes into the banking system to help replace the notes banned in November, a parliamentary source quoted central bank governor Urjit Patel as saying on Wednesday.

Patel met a parliamentary panel on finance on Wednesday to answer questions about the country's recent move to abolish 500 and 1,000 rupees notes, or 86% of the currency then in circulation, in a bid to unearth billions of dollars of unaccounted money.

About Rs 15.4 lakh crore worth 500 and 1,000 rupees notes were removed from circulation after the Nov. 8 announcement from the government.

Patel is learnt to have told the parliamentary panel on demonetisation that discussions between the central bank and the government on the process began early last year.

Congress members of the committee asked questions like whose decision was it to withdraw high currency notes and also about autonomy of RBI, sources said.

BJP members of the panel, headed by Congress leader Veerappa Moily, however, chose not to raise much questions during the meeting, they added.

The questions put up by the panel ranged from the total amount of money that came back during the demonetisation period to the total amount of new bills of Rs 500 and Rs 2,000 that were printed and sent to the banks.

It is also learnt that Manmohan Singh, one of the members who had described demonetisation as monumental management failure, too raised questions on the issue.

Sources said Patel told the Parliament standing committee on finance over the demonetisation issue that discussions between the central bank and the government were taking place since early last year.

The Finance Ministry has sought time from the panel to provide answers to the queries raised during the meeting in which the Finance Secretary made a presentation before the committee, the sources said, adding that the members seemed not too satisfied with the replies.

The crucial meeting was held to discuss the "demonetisation of Indian currency notes of Rs 500 and Rs 1,000 and the impact thereof".

Patel is also scheduled to appear before the Public Accounts Committee of Parliament on the same issue on January 20.
 

Senior bureaucrats, including Department of Economic Affairs Secretary Shaktikanta Das, Banking Secretary Anjuly Chib Duggal and Revenue Secretary Hasmukh Adhia, and top bank honchos like Chanda Kochhar of ICICI Bank and Usha Ananthasubramanian of Punjab National Bank are also to appear before the committee.