The newly launched 2,000-rupee banknotes carry the signature of present central bank chief Urjit Patel but the process to print those bills began when his predecessor Raghuram Rajan was still in office, a Hindustan Times investigation has found.
Two Reserve Bank of India (RBI) presses that produced Rs 2,000 bills told HT that they initiated the “first stage of printing process” on August 22, the first working day after the government named Patel the next central bank chief.
Patel, however, didn’t take over from Rajan until almost two weeks later on September 4, raising questions over why the outgoing governor’s signature was not on the bills.
Questions sent by email to the RBI and the Union finance ministry seeking clarification on whether Rajan was a party to the decision to introduce Rs 2,000 notes or why the new bills didn’t bear his signature went unanswered.
Similar queries sent to Rajan by email didn’t elicit a response.
But HT pieced together evidence that suggested the RBI presses could have started printing the notes with Patel’s signature even while Rajan was in office.
In December, the RBI told the parliamentary panel on finance that it got permission to print Rs 2,000 notes on June 7, 2016. “Accordingly, the presses were advised in June 2016 to initiate production of new series notes,” the bank told the panel in a letter, a copy of which is with Hindustan Times.
Usually, the process of printing begins immediately after an order is placed by the central bank – which in this case came two and half months before the presses began the process to print the Rs 2,000 notes on August 22.
“Firstly, the RBI board approves the proposed changes in security features and secondly gets it ratified by the board of BRBNMPL,” Vipin Malik, ex-member of the boards of RBI and BRBNMPL, told HT, explaining the steps before the printing starts.
The information on the printing of Rs 2,000 notes came from Bharatiya Reserve Bank Note Mudran (P) Ltd (BRBNMPL), a wholly owned subsidiary of the central bank, in response to a Right to Information (RTI) application filed by Hindustan Times.
The company also said it started the printing process for the redesigned Rs 500 notes only on November 23. This validates allegations that the government focused only on printing Rs 2,000 notes which worsened a cash crisis triggered by Prime Minister Modi’s decision to recall old 1,000-and 500-rupee bills on November 8.
The revelations come just at the end of the first 100 days of the government’s move to scrap 1,000-and 500-rupee bank notes, and even as the central bank struggles to restore normality in cash flow in the economy.
The decision to recall the two high value banknotes was kept a secret, and Modi’s announcement on national television came just hours after the RBI ratified the so-called demonetisation move.
Rajan has avoided speaking on the decision, feeding speculations that his tenure was not extended because of alleged disagreement with the government over the decision.
Both government and RBI have refused to go into the details of the demonetisation process. Economic affairs secretary Shaktikanta Das told reporters shortly after Modi’s announcement that there was “no need to go into the process which led to this decision.”