New restrictions are 'desperate' steps of 'desperate' govt: Chidambaram

'RBI makes new rule on deposit, FM contradicts. Who should citizen believe? Neither has credibility,' Chidambaram said

Dubbing the new restrictions on deposit of old currency notes as "desperate measures of a desperate government", former Finance Minister P Chidambaram on Tuesday said hoarders have laundered their money while the poor and the middle class have been left high and dry.

In a series of tweets on the new restrictions, he wondered, "Old notes usable until December 15. Why can't we deposit remaining notes until December 30 as notified?"

Chidambaram said, "RBI makes new rule on deposit, FM contradicts. Who should citizen believe? Neither has credibility.

"Hoarders have laundered their old notes. The poor and middle class left high and dry," he said.

"Desperate government resorting to desperate measures. Breaking Prime Minister's promise of November 8 and Finance Minister's assurance of November 11," the senior Congress leader added.

Chidambaram's sharp reaction came a day after the government tightened rules for depositing junked 500 and 1,000 rupee notes, saying individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it had not been done so far.

After banning old 500 and 1,000 rupee notes on November 8, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30. There was no limit on the quantity or value of the demonetised notes that could be deposited.

However, the government on December 17 issued a gazette notification putting restrictions on deposits henceforth.

Chidambaram had only on Monday hit out at RBI Governor Urjit Patel, saying that he was "extremely disappointed" that the central bank chief did not handle the demonetisation issue as any "independent autonomous institution should have".