RBI governor Urjit Patel couldn’t give on Wednesday a time frame for an end to cash restrictions nor could he provide a parliamentary panel a figure for the amount of banned notes deposited into banks after demonetisation, sources said.
The central bank had pumped in Rs 9.2 lakh crore in new banknotes to help replace the Rs 500 and Rs 1,000 bills banned on November 8, Patel told a parliamentary panel. Around Rs 15.4 lakh crore worth of the notes were removed from circulation.
“The RBI governor was unable to tell us how much old currency has come to the banks,” panel member and Trinamool Congress MP Saugata Roy told media, criticising Patel for his “inability” to answer vital questions.
The deadline for depositing old notes ran out on December 30, though these can be deposited at RBI offices till March 31.
Patel and several finance ministry officials appeared before the panel to answer questions on the demonetisation decision that triggered a huge cash crunch and restrictions on money withdrawals.
Patel, who took over as the country’s top banker on September 4, had a tough time fending off MPs, prompting former prime minister Manmohan Singh, who is also on the committee, to come to his rescue, sources in the panel said.
Singh, a former RBI governor, told Patel not to answer questions that would compromise the autonomy of the central bank, sources said.
Patel failed to provide a figure for how many of the banned notes were had been deposited. The RBI was still in the process of calculating how much money came into the banking system, he said.
The figure would be an indication of the success or failure of the disruptive move, which the government said was aimed at curbing black money and choking counterfeit currency.
Congress’ Digvijaya Singh wanted to know when restrictions on withdrawals would end.
Patel said the present limit – Rs 24,000 per account holder, per week and Rs 96,000 per month – was reasonably high and normalcy would be restored gradually.
Revenue secretary Hasmukh Adhia said data suggested that on an average, a customer withdrew Rs 50,000 per month in pre-demonetisation days.
“You are not lifting the limit as it will lead to chaos,” said Digvijaya.
“You don’t need to reply. Answer questions that do not compromise the autonomy of the central bank,” Manmohan told Patel, as he asked members to “respect” the RBI.
The former PM has described the currency recall as “monumental mismanagement and organised loot”.
Demonetisation has emerged as a major campaign issue in next month’s five state elections, with the Opposition targeting the Modi government and his BJP party for putting people through hardship.
Patel told the panel that bills worth Rs 9.1 lakh crore had been released post-demonetisation, 43% of these were in the denomination of Rs 500 and Rs 2,000.
Congress leader M Veerappa Moily-led panel had summoned Patel to brief the members on demonetisation, its impact on the economy and the steps taken to ease cash crunch.
The process of recalling old notes started in January 2014 while the call to withdraw the two high-value notes was taken in January 2016, a finance ministry official told the panel.
The RBI was in agreement with the government on the objectives behind scrapping of the two bills, said Patel, who along with finance ministry officials is likely to be called again by the panel after February 8.
The RBI governor is to appear before the public accounts committee of Parliament on January 20.