NEW DELHI: Contrary to prevalent thinking, it was the government which had “advised ” the Reserve Bank to junk Rs 500 and Rs 1,000 notes on November 7 and the board of the national bank the exact following day prescribed the demonetization.
In a 7-page note to Parliament’s Department-Related Committee of Finance headed by Congress pioneer M Veerappa Moily, the RBI expressed that the legislature had on November 7, 2016 ” advised the Reserve Bank that to relieve the triple issues of forging, fear based oppressor financing and dark cash, the Central Board of the Reserve Bank may consider withdrawal of the legitimate delicate status of the notes in high divisions of Rs 500 and Rs 1,000.”
The RBI’s Central Board met the precise following date to “believe the government’s recommendation” and then “deliberations” chose to “suggest to Central Government that the lawful delicate status of the banknotes in the high denominations of Rs 500 and Rs 1000 be withdrawn.”
Union Cabinet head by PM Narendra Modi met inside hours of that proposal on November 8 and restricted dissemination of old 500 and 1000 rupee notes.
A few priests have hitherto kept up that the legislature had just followed up on RBI proposal of demonetization.
In the note to the board, the RBI said it had been in the most recent couple of years taking a shot at presentation of new arrangement of banknotes with enhanced security components to secure them against duplicating.
In parallel, the government had been finding a way to control black cash and combat terrorism.