New Delhi: Reserve Bank of India Governor Urjit Patel was on Wednesday virtually cornered by members of the Parliamentary Standing Committee on Finance as he apparently “failed to give a satisfactory reply” on how much old currency had been deposited in the banks.
He also revealed that discussions between the central bank and the government on the process began early last year.
As Mr Patel was being pilloried by the members, it was former Prime Minister, Dr Manmohan Singh who came to his rescue. Dr Singh, who was an RBI governor himself (from 1982 to 1985), did not approve of the way the members were speaking to Mr Patel. “You all should not speak to him like that,” Dr Singh told the members, sources said.
The RBI governor also repeatedly fumbled to give an answer to the satisfaction of the members as to when things will return to normalcy, said sources. Mr Patel told the committee that '9.2 lakh crore or 60 per cent of demonetised currency has been replaced.
On being asked who took the decision to demonetise '500 and '1,000 currency notes, the RBI governor is reported to have told the MPs that the “government forward the decision to me”. But the governor said the Central bank was in agreement with the government on the objective behind the scrapping of the '500 and '1,000 notes.
“RBI officials were very defensive on the demonetisation,” the sources said. Meanwhile, Economic affairs secretary Shaktikanta Das told the standing committee that the government had been planning for the demonetisation since the May of last year and meetings on demonetisation were held every week since, said sources.
The Committee headed by former Union Minister M. Veerapa Moily had called the RBI and finance ministry officials to discuss the “demonetisation of the Indian currency notes of '500 and '1,000 and the impact thereof”.
However, as members could not complete their questions, finance ministry officials will be called once again, most likely after Parliament goes on a break during the Budget session.
Mr Patel will once again face tough questions from MPs later this week as he is scheduled to appear before the Parliament’s Public Accounts Committee (PAC) headed by Congress leader K.V. Thomas on Friday.
