Demonetisation: RBI refuses to share details citing danger to life and national security
The Reserve Bank of India has refused to share specific details of Prime Minister Narendra Modi�s ban on high-value banknotes citing danger to life and national security.
The Reserve Bank of India has refused to share specific details of Prime Minister Narendra Modi’s ban on high-value banknotes citing danger to life and national security.
Power Minister Piyush Goyal had told parliament in November that the RBI recommended the move, which was accepted by the cabinet and announced by Modi on Nov. 8. But, the Right to Information requests filed by Bloomberg News show that RBI board approved the ban three hours before Modi’s speech and hadn’t discussed the matter before.
However, the RBI told a lawmakers’ panel this week that the government had "advised" the monetary authority to "consider" the ban a day before the RBI board made its recommendation. The government then "considered the recommendations" and decided to withdraw the notes, culminating in Modi’s address that blindsided the nation.
“To a question seeking details on the number of demonetised notes already at banks on the evening of PM Modi’s speech, the RBI claimed an exemption, citing danger to the life or physical safety of anyone who disclosed this information to the public,” Bloomberg said.
“The RBI also claimed exemptions on two questions seeking detail on its preparations for the demonetisation and studies it used to forecast the impact of the move. Sharing these ‘sensitive matters’ would endanger India’s sovereignty, integrity and security,” it added.
The government told parliament in November the decision to withdraw the 500 and 1000-rupee banknotes was taken by the RBI.
“The cloak of secrecy that has shrouded the currency ban decision is likely to bolster the view that authorities, both on Mint Street and in New Delhi, were not prepared for such a decision and the way it was announced,” Bloomberg said.
“It risks undermining perceptions of the central bank’s independence and raises questions about PM Modi’s decision-making style and his communication with the RBI,” the report added.