Demonetisation Fails as 97 % cash back in banks

urjit jaitely

New Delhi, January 4: Mocking up the cause of demonetisation led by Prime Minister Narendra Modi, the latest reports in media claim that 97 per cent of old notes have come back to the banking channel as on December 30.

As per the reports by Bloomberg and Indian Express, banks have received cash worth Rs 14.97 lakh crore till December 30. It should be noted here that bank windows are still open till March 31, for NRIs and those who were outside the country in the 50-day lock in period to deposit the banned notes.

Going by the reports, despite circulating 75 directives and U-turns in 50 days, RBI and Finance Ministry are in a total tizzy over the bank deposits and perhaps this explains why Modi government has been mute over the results of noteban.

The prevailing confusion in the Finance Ministry and RBI is also eminent from the reports that claimed the tension between the two. They said, the central government is upset by RBI for not implementing its directives correctly and RBI has been blaming the government for maligning its image as a central authority to regulate banks.

Read More: Government has virtually taken over RBI’s functions

Read More: RBI and government at loggerheads over demonetisation

Opposition parties have strongly criticized Modi government for hampering the autonomy of RBI. After the culmination of PM’s 50-day deadline, Congress has demanded whitepaper on demonetization  by the central government and criticized PM Modi for running an autocratic government that has not only kept a silence on the total amount of bank deposits but also continued people’s woes by imposing withdrawal restrictions in banks and ATMs.

What came as the biggest demonetisation disappointment in the New Year was RBI’s refusal for accepting old currency notes. Just yesterday a woman stripped herself outside RBI’s Delhi branch when she was refused to deposit her old notes.

On November 8 Prime Minister Narendra Modi had announced demonetisation of 86 % of country’s cash as a surgical strike on black money, counterfeit currency and terror funding in the country. With such high deposits in banks, the PM’s claim on black money takes a complete backstage.

As per Modi government’s initial claims only Rs 12 to 13 lakh crore were expected to come as deposits in banks. Attorney General Mukul Rohtagi in the Supreme Court said that only Rs 10 lakh crore is expected to come as bank deposits and claimed the rest would be dished out as black money and clean the Indian economy.

Many experts and economists have condemned demonetisation as means of legalised plunder and a historical example of how a democratic government breached people’s right to save their own money.

Read More: Forbes says India’s demonetisation is immoral and sickening 

While PM on Novemner 8, requested countrymen to exchange or deposit the old notes of Rs 500 and Rs 1000 from banks till December 30 and from RBI branches till March 31, but banks not only refused to exchange the old currency with in a few days of demonetisation but later on refused to accept old notes after Dec 30 even at RBI branches.

I don’t know,” is what Finance Minister Arun Jaitley had to say about the media reports claiming the overwhelming deposits up to 97 % in the banks. The FM yesterday said he would not interfere in the central bank’s decision of refusing to deposit

The FM further said he would not interfere in the central bank’s decision of refusing to deposit bank-notes till March 31. He tweaked Prime Minister’s November 8 address to the nation and said PM had said RBI would decide the term and conditions and thus Ministry would not interfere.

However, it is well known that RBI and Finance Ministry have been working hand in gloves to implement demonetisation till date. Just today the news was out that finance ministry sent a joint secretary to RBI to coordinate the central bank’s currency chest operations. It is a quite unusal step and highlights government’s role in demonetisation.

Wefornews Bureau


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