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Demonetisation: RBI governor says notes still being counted

LiveMint logoLiveMint 12-07-2017 PTI

New Delhi: Reserve Bank of India (RBI) governor Urjit Patel on Wednesday appeared before a Parliamentary panel for the second time and is understood to have said the deposited demonetised notes are still being counted and, therefore, was not in a position to give a figure of the scrapped currency back in the system.

During the more than three-hour long meeting of the Standing Committee on Finance, Patel took a lot of questions but members, who did not want to be named, said he did not provide any “specific number” on the amount of money that came back to the system post-demonetisation on 8 November.

The Committee is chaired by senior Congress leader M. Veerappa Moily. With Patel not providing any particular figure, saying that counting of the notes was still in progress, many panel members were reported to have expressed dissatisfaction with his replies.

Moily said the Committee will present its report on demonetisation in the Monsoon Session of Parliament and that the RBI governor will not be called again on the note ban issue. The session is scheduled to start on 17 July and is expected to conclude on 11 August.

“We had a lengthy discussion (on demonetisation and various other issues) today... The panel will not be calling RBI governor again on the issue of demonetisation,” Moily told PTI.

Patel appeared before the panel for the second time today after cancellation of old Rs500 and Rs1,000 currency notes on 8 November—a government decision which had attracted a lot of criticism from the Opposition.

In January too, the RBI governor had appeared before the committee and had told the members that he would submit a statement on the amount of money that came back into the system after demonetisation. Along with Patel, RBI deputy governor S.S. Mundra was also present at Wednesday’s meeting.

After the meeting, a senior member, who did not want to be named, said the governor did not provide any figure but gave details on remonetisation. Former Prime Minister Manmohan Singh, who was present at the meeting, did not ask any question to the governor, according to three panel members.

Interestingly, it was Singh who had rescued Patel from a tough grilling during the January meeting when he intervened to say that the central bank and the governor’s position as an institution should be respected. Replying to queries from the members on demonetisation and its fallout, Patel said counting of banned old Rs500 and Rs1,000 currency notes goes on continuously for six days in a week.

Patel told the panel that the RBI has cut down on holidays to complete counting of the junked currency note and that its staff is working “round the clock” except on Sundays, a member quoted Patel as having said. According to some members, the central bank chief informed the panel that besides Saturdays, many other holidays have also been suspended in order to complete counting of the scrapped notes.

The RBI has also issued tenders for new machines for counting of the notes, the meeting was told. RBI has a staff strength of 15,000. During the course of the meeting, one Congress member even asked whether RBI would be able to provide details of amount of cash deposited post-demonetisation by May 2019—the time when the NDA government completes its five-year term.

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