8 of 10 board members okayed note ban: RBI guv

8 of 10 board members okayed note ban: RBI guv

Eight of 10 members of the RBI’s central board had advised the government to withdraw Rs 500 and Rs 1,000 currency notes, the bank’s governor Urjit Patel said on Friday.

Just a few hours

The board met at 5.30 pm on November 8, just two-and-a-half hours before Prime Minister Narendra Modi made the dramatic note ban announcement, Patel told Parliament’s Public Accounts Committee, chaired by Congress leader K V Thomas.
Congress leader and former finance minister P Chidambaram had claimed only three directors had backed the demonetisation decision, raising questions over the autonomy of the central bank.

The board meeting was attended by Governor Patel, deputy governors R Gandhi and S S Mundra, and five directors of the RBI – Nachiket Mor, Bharat N Doshi, Sudhir Mankad, Shaktikanta Das and Anjuly Chib Duggal.

‘Strategic reasons’
Patel informed the committee that deputy governor N S Vishwanathan, also a member of the board, had stayed back in Mumbai for “strategic reasons” to brief bankers personally immediately after the decision was taken.

Another director, Natarajan Chandrasekaran, was abroad at the time of the meeting.
Members of the PAC wanted the RBI to probe “abnormal transactions” seen in co-operative banks after demonetisation was announced.

Members gave examples of how new bank accounts had been opened by co-operative banks, and dormant accounts were flush with funds after November 8.

Patel said the income tax department had seized Rs 474.37 crore between November 9, 2016, and January 4, 2017, of which Rs 112.29 crore was in new currency.

He also said no counterfeit currency notes (in Rs 500 and Rs 1,000 denomination)
had been seized by agencies under the Central Board of Excise and Customs between November 8 and December 30, 2016.

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