The RBI Governor has been summoned with a notice by PAC (Public Accounts Committee) to appear before it on January 20th 2017 along with Financial Ministry officials, Revenue Secretary and the Finance Secretary, to explain on a series of questions on the demonetization process. PAC has asked Patel, the Governor, as to how the decision on demonetization was taken and the subsequent effect of such a move on our economy.
The RBI Governor has also been facing questions, on shortages of replacement currency and restrictions on depositing old notes which has caused long queues at Banks and ATMs. The policy rate of RBI has been kept at 6.25 per cent without any changes, though there was hue and cry from all corners on cash shortage issue, which has threatened to put a brake on the fastest growing economy. The expectation on a rate cut was at least to the tune of 25 bps. The pressure was built up due to 86 per cent per cent cut in the currency circulation. The PAC has also called for
a. Details of currency returned to the bank
b. Black money received
c. Amount of new currency released so far.
d. Country’s preparedness to handle cashless transaction.
The meeting was scheduled in December last year, however, since the exchange process of old currency was scheduled for 50 days, the committee decided to call for the meeting in January this year.