From the Viewsroom

His Master’s Voice?

Anand Kalyanaraman | Updated on March 09, 2018


The RBI should stop toeing the Government’s line

So, how much old currency did the banks finally collect during the demonetisation period? Even three months after the December-end deadline for depositing the scrapped ₹500 and ₹1,000 notes, that question remains an enduring mystery. The finance minister said recently in Parliament that the quantum will be announced by the RBI after every note is counted. “RBI is counting each and every note by pulling out fake currency and when they get the accurate figure, they will release it,” is what he said.

Really? It’s astonishing that the central bank has been unable to compile this figure even 90 days after the last of the old notes was deposited by the country’s residents. Especially, given that much of the counting would have already been done by the banks that got the deposits. Also, didn’t banks have mechanisms to identify and weed out fake currency in the first place?

The continuing long delay in making public this key number at best betrays the RBI’s inefficiency — uncharacteristic of an institution that not until long ago had enjoyed a stellar reputation. At worst, it strengthens the impression gained after the demonetisation exercise that the central bank has given up its independence and become its master’s voice — giving out information or going silent according to the Government’s bidding. Reports have it that almost all of the old currency was deposited with banks, belying the Government’s hopes and defeating a key objective of demonetisation. It’s high time the central bank confirms or denies these reports — with facts and figures — even if the findings are not to the liking of the Government.

The RBI’s repeated stonewalling of information throughout the demonetisation exercise and after, citing implausible reasons such as “danger to life and national security” has dented the institution’s credibility. It’s time it got back its voice —better late than never.

Senior Assistant Editor

Published on April 04, 2017

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