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Committee grilled RBI Governor to know truth about pre and post demonetisation era: NCP

ANI  |  New Delhi [India] 

A day after Reserve Bank of India (RBI) Governor Urjit Patel came under scanner in a Parliamentary committee meeting, the Nationalist Congress Party (NCP) on Thursday said that the committee grilled the former to know the truth about pre and post demonetisation era.

"The committee certainly wanted to grill RBI to know the truth about pre and post demonetisation era when how things operated and what was the role of RBI. Unfortunately the country believes that RBI was also kept in dark with regard to issuance of various ordinance, orders and notification and this was nothing but some kind of onslaught on the autonomy and independence of RBI. So definitely the members must be up their sleeves with the very uncomfortable questions for the RBI governor and he must be in a soup," NCP leader Majid Memon told ANI.

He further said that he was glad to know that former prime minister Manmohan Singh came to the rescue of Patel in replying to parliamentary committee.

"He came to the rescue of RBI Governor to respond to certain queries which probably he may have been finding difficult to do. So, this is just a human helping hand but I don't think Manmohan Singh would approve what mistakes have been committed by either the Government of India or RBI in the matter of demonetisation," Memon added.

Members of the Parliamentary Standing Committee on Finance yesterday criticized the RBI Governor for his inability to answer queries related to demonetisation.

Patel was unable to tell us how much money has come back to the banks," said Saugata Roy, TMC MP.

"The governor was unable to tell us that how much old currency has come into the banks," added Saugata Roy.

Sources also quoted the RBI governor, as telling the Parliamentary Standing Committee on Finance, that Rs.9.2 lakh crore in new currency has been introduced into the system.

Patel briefed the parliamentary panel about demonetisation and its impact on the economy and the steps taken by the central bank to deal with the cash crunch.

Manmohan Singh, who was a former RBI governor, had also come to the rescue of Patel and advised him not to reply to questions which could create problems for the central bank, whose autonomy, according to critics, has been depleted by its role in the demonetisation drive.

Besides, representatives of the finance ministry, including from the Department of Economic Affairs, Financial Services and Revenue, briefed the Standing Committee on Finance headed by former Union Minister and senior Congress leader M. Veerappa Moily.

Representatives of Indian Banks Association (IBA), State Bank of India (SBI), Punjab Bank (PNB) and Oriental Bank of Commerce (OBC) were also present in the meeting.

It may be recalled that the RBI had earlier given a seven-page reply to the questions raised by the committee. It had then said that it had received advisory instructions from the government to consider the demonetisation of Rs.500 and Rs.1,000 notes.

According to the RBI, the government wanted it to consider demonetisation of high value currencies "to mitigate the triple problems of counterfeiting, terrorist financing and black money" on November 7. The central board took a decision on this and the government announced the demonetisation on November 8.

The RBI had cleared the introduction of new Rs. 2,000 notes in May 2016 and that the central board had not discussed the ban of Rs. 500 and Rs. 1,000 notes in its meetings in May, July or August.

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

Finance ministry officials informed the committee about the pros and cons of demonetisation, starting early 2016.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 19 2017. 04:08 IST