When was RBI governor told of note ban, House panel asks govt

The PAC has also asked how many banknotes have been cancelled as on December 15, 2016

When was Reserve Bank of India (RBI) Governor Urjit Patel informed about the government’s decision to demonetise Rs 500 and Rs 1,000 currency notes, the Public Accounts Committee of Parliament has asked the finance ministry.

Key finance ministry officials — Finance Secretary Ashok Lavasa, Economic Affairs Secretary Shaktikanta Das, Revenue Secretary Hasmukh Adhia and Financial Services Secretary Anjuly Chib Duggal — are scheduled to appear before the panel on Friday. The Budget session of Parliament takes a break on Thursday. These officials were called as the PAC, headed by Congress lawmaker K V Thomas, was not satisfied with the responses the RBI governor gave the panel on January 20. The questions the PAC has sent to the finance ministry officials ask about the number of deposits made after November 8 and if the government had realised the virtual paralysis of the economy because of demonetisation. The PAC has also asked how many banknotes have been cancelled and seized from Indian nationals, spies, terrorists and smugglers as on December 15, 2016. It has asked for state-wise details.

Questioning the legality of demonetisation, the PAC also asked the ministry whether the RBI Act, 1934, prescribed any procedure for declaring notes illegal, and, if so, under what provisions. The panel has also asked the procedure prescribed under Section 26 of the Act and whether the same was followed.

When were RBI board members asked to attend the relevant meeting, when was it held and how many members attended? Further, the panel has asked whether the government notification dated November 8 cancelling the legal tender of Rs 500 and Rs 1,000 notes was issued in exercise of powers conferred by sub-section 2 of Section 26 of the RBI Act. Does the sub-section confer any other powers, like a ceiling on cash withdrawal per day, it has asked. If not, under what provisions were such ceiling imposed. It has also asked if any other statute was mentioned in the government notification on demonetisation.