The Big Reverse
Page 23
18.https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/1TRANS81F64B7BD00245109A43C2D6A6728404.PDF
19.See https://rbi.org.in/scripts/AnnualReportPublications.aspx? Id=1171
20.This section allows a public authority to withhold information, the disclosure of which ‘would endanger the life or physical safety of any person.’ The section also allows exemption for disclosing information which would ‘identify the source of information or assistance given in confidence for law enforcement or security purposes.’ However, Under Section 4 of the Right to Information (RTI) Act, it is mandatory for a public authority to ‘publish all relevant facts while formulating important policies or announcing the decisions which affect public and to provide reasons for its administrative or quasi-judicial decisions to affected persons.’ Therefore, in principle, the RBI should have released information on demonetization and its implementation on a suo motu basis. Not only was no information on this matter placed in the public domain under Section 4, by the RBI, RTI activists found to their dismay that both the RBI and the Prime Minister’s Office (PMO) refused to share information under cover of Section 8 of the RTI Act.
21.‘Raghuram Rajan breaks silence, says neither he nor RBI under him wanted demonetisation’, Hindustan Times dated 5 September 2017, https://www.hindustantimes.com/india-news/raghuram-rajan-breaks-silence-says-he-wasn-t-on-board-for-demonetisation/story-6rXr8VWBpFd4w37NySulEN.html
22.‘Raghuram Rajan warned Narendra Modi against demonetisation, his new book shows’, The Economic Times dated 3 September 2017, https://economictimes.indiatimes.com/news/economy/policy/raghuram-rajan-warned-narendra-modi-against-demonetisation-his-new-book-shows/articleshow/60350973.cms
23.Speaking at the 2018 Albert H. Gordon Lecture on Leverage, Financial Crises, and Policies to Raise Economic Growth at the Harvard Kennedy School in Cambridge on 11 April 2018.
24.‘India’s Demonetization Debacle’, the Wall Street Journal dated 15 December 2016.
25.‘Who knew about Modi’s secret demonetisation plan?’, Mint dated 10 December 2016, https://www.livemint.com/Politics /PZJjaYlbSXITq8gIrZePnL/How-closely-guarded-was-Narendra-Modis-demonetisation-plan.html
26.‘Demonetisation: Who knew, who didn’t’, rediff.com, 22 November 2016, http://www.rediff.com/money/report/demonetisation-who-knew-who-didnt/20161122.htm; ‘Demonetisation, GST had some impact on GDP, but we will soon reach 8 per cent’, The Economic Times dated 29 October 2017, https://economictimes.indiatimes.com/news/economy/policy/demonetisation-gst-had-some-impact-on-gdp-but-we-will-soon-reach-8-per-cent/articleshow/61312914.cms
27.‘The babu who planned demonetisation’, rediff.com, 20 November 2017, http://www.rediff.com/business/special/the-babu-who-planned-demonetisation/20171120.htm
28.The G20, or Group of 20 is an international forum for the governments and central banks of 19 major nations and the European Union. A Sherpa is a personal representative of the leader of a member country at an international Summit meeting. The Sherpa engages in planning, negotiation, and implementation of tasks through the Summit. They coordinate the agenda, seek consensus at the highest political levels, and participate in a series of pre-Summit consultations to help negotiate their leaders’ positions.
29.‘“If it fails, then I am to blame,” PM Modi reportedly told cabinet on demonetisation’, Business Today dated 9 December 2016, https://www.businesstoday.in/current/economy-politics/if-it-fails-then-i-am-to-blame-pm-modi-reportedly-told-cabinet-on-demonetisation/story/242038.html
30.‘Who Recommended Note Ban? Both RBI and Govt Pass the Buck’, The Quint dated 10 January 2017, https://www.thequint.com/news/india/who-implemented-note-ban-both-rbi-and-govt-pass-the-buck-demonetisation-rs-500-1000-
31.‘India pressed ahead with banknote ban despite RBI concerns’, dated 21 January 2017, https://in.reuters.com/article/rbi-independence-demonitisation/india-pressed-ahead-with-banknote-ban-despite-rbi-concerns-idINKBN1550QM
32.The PM in his 13 November 2016 speech in Goa explicitly referred to this, ‘Those who didn’t throw a penny in waters of Ganga are sinking their bundles in it…’
33.In an article in The Indian Express, journalists Manoj C.J. and Ravish Tiwari quoted a government source, apparently embarrassed by these bombastic claims that played down Rohatgi’s remarks to the Supreme Court as part of ‘court craft deployed by lawyers to win brownie points.’ ‘Demonetisation: As money flowed back in, how goalposts were shifted’, The Indian Express dated 31 August 2017, https://indianexpress.com/article/india/demonetisation-rbi-annual-report-arun-jaitley-pm-narendra-modi-as-money-flowed-back-in-how-goalposts-were-shifted-4821566/
34.C. Rangarajan was nominated to the Rajya Sabha and served as Chairman of the Prime Minister’s Economic Advisory Council. Highly respected in banking and academic circles, Rangarajan is Chairman of the Indian Statistical Institute.
35.Interview with LathaVenkatesh of CNN News 18 on 13 November 2016.
36.D. Subbarao was an IAS officer who topped the civil services examination. He had a master’s degree in both Economics and Physics. Formerly Finance Secretary in the Ministry of Finance, he is credited with having steered India safely through the global financial crisis of 2008.
37.‘Full text of former RBI Governor D. Subbarao’s views on demonetisation’, Business Standard dated 16 November 2016, https://www.business-standard.com/article/economy-policy/full-text-of-former-rbi-governor-d-subbarao-s-views-on-demonetisation-116111601524_1.html
38.RBI Annual Report FY 2017–18, Balance Sheet, and Income Statement.
39.Para XII.5.2 RBI Annual Report FY 2017–18.
40.K.C. Chakrabarty was Deputy Governor of the Reserve Bank of India from 2009 to 2014. A doctorate-holder in statistics, he was the former Chairman of the Indian Bank and then of the Punjab National Bank.
41.‘“UPA government also proposed it, we said no”’, The Hindu dated 18 November 2016, https://www.thehindu.com/business/UPA-government-also-proposed-it-we-said-no/article16510882.ece; ‘From press-to-ATM: How money travels’, The Indian Express dated 22 November 2016, https://indianexpress.com/article/explained/demonetisation-old-currency-notes-black-money-atm-queues-4388437/; ‘Demonetisation will lead to 6 months of chaos: Ex-RBI deputy guv Chakrabarty’, the Hindustan Times dated 21 November 2016, https://www.hindustantimes.com/business-news/demonetisation-will-lead-to-six-months-of-chaos-ex-rbi-deputy-guv-chakravorty/story-GbZaYU4zckCClqVHaflERK.html; ‘PM Modi Not Properly Briefed on Demonetisation, Says Ex-RBI Dy Guv’, News 18 dated 19 November 2016, https://www.news18.com/news/india/pm-modi-not-properly-briefed-on-demonetisation-says-ex-rbi-dy-guv-chakrabarty-1313234.html
42.‘“Reverse Bank of India”: How note ban has turned a revered institution into a joke’, Debasish Roy Chowdhury, South China Morning Post dated 15 January 2017, https://www.scmp.com/week-asia/politics/article/2061878/reverse-bank-india-how-note-ban-has-turned-revered-institution; ‘“Reverse Bank of India”: Twitter reacts to RBI’s U-turn on cash deposits’, Hindustan Times dated 21 December 2016, https://www.hindustantimes.com/india-news/reverse-bank-of-india-twitter-reacts-to-rbi-s-u-turn-on-cash-deposits/story-NhoVkRjz1oHFSq6Se0vSLL.html
43.The RBI finally permitted DCCBs to deposit demonetized currency (cumulatively worth `2,772 crore) with it by 20 July 2017. This matter once again took centre stage on 22 June 2018, when RTI activist Manoranjan S. Roy, shared with IANS that (1) The Ahmedabad District Cooperative Bank (ADCB), of which has BJP President Amit Shah was a director, had received the highest deposits of banned notes amongst all DCCBs: `745.59 crore between Nov 9–14 (2) The Rajkot District Cooperative Bank, whose chairman Jayeshbhai Vitthalbhai Radadiya was a cabinet minister in the Gujarat Govt., got the second highest deposits of old notes worth `693.19 crore. (3) Seven public sector banks (PSBs), 32 SCBs, 370 DCCBs, and a little over three-dozen post offices across India collected `7.91 lakh crore – more than half (52 per cent) of the total amount of old currencies of `15.31 lakh crore deposited with the RBI.
44.Circular Number: RBI/2016-17/133
DCM (Plg) No. 1280 /10.27.00/2016-17, dated 15 November 16.
45.Mysore Paints and Varnish Ltd (MPVL), which produced the indelible ink received an order for 2,96,500 bottles (5 ml) of indelible ink from the RBI. Each bottle cost around `116 and if used as advised, could apparently ink 500 people. By that math, 148.25 million people could have been marked using the fresh supplies of indelible ink. H.A. Venkatesh, chairman of MPVL, confirmed to the Mint on 18 November 2016 that they had dispatched 30,000 bottles to RBI Mysore, which would then distribute it among banks across the country. It is not known whether the aforementioned bottles were received, or sent to banks.
46.Circular Number: RBI/2016-17/145 DCM (Plg) No.1320/ 10.27.00/2016-17.
47.‘Day 9: Demonetisation Death Toll Rises To 55’, HuffPost dated 18 November 2016, https://www.huffingtonpost.in/2016/11/17/day-9-demonetisation-death-toll-rises-to-55_a_21608769/
48.‘Demonetisation death toll: 90 people & counting as note ban takes tragic turn’, 9 December 2016, http://www.catchnews.com/national-news/deaths-due-to-demonetisation-since-8-nov-here-s-a-list-of-the-casualties-of-pm-modi-s-note-ban-1480484645.html
49.‘The bride’s ready, but her father’s in queue – demonetisation spoils India’s wedding plan’, Suneera Tandon, 23 November 2016, https://qz.com/india/842390/the-brides-ready-but-her-fathers-in-queue-narendra-modis-demonetisation-spoils-indias-wedding-plan/
50.Circular Number: RBI/2016-17/189 DCM (Plg) No. 1859/ 10.27.00/2016-17.
51.‘Attorney general tells Supreme Court: Modi’s words don’t matter as much as the fine print’, Scroll.in dated 21 March 2017, https://scroll.in/article/832438/attorney-general-tells-supreme-court-modis-words-dont-matter-as-much-as-the-fine-print
52.Usha Thorat was the Deputy Governor of the RBI from 2005–2010, and played a major role in setting the RBI’s financial inclusion agenda. A graduate from the Delhi School of Economics, she was gracious, thoughtful, consultative and a role model and mentor to many senior women in the Indian banking industry.
53.‘A note to RBI’,The Indian Express dated 28 January 2017, https://indianexpress.com/article/opinion/columns/reserve-bank-of-india-rbi-remonetisation-rules-problems-note-to-bank-4447698/
54.‘“11 Bankers Died Due To Stress”: Leader of Bank Officers’ Union Wants RBI Governor To Resign For Demonetisation “Havoc”’, HuffPost dated 21 November 2016, https://www.huffingtonpost.in/2016/11/20/11-bankers-died-due-to-stress-leader-of-bank-officers-union_a_21610507/; ‘Here are the 105 people who died in 45 days of demonetisation’, ShilpaShaji, NaradaNews, 22 December 2016, http://naradanews.com/2016/12/here-are-the-97-people-who-died-in-37-days-of-demonetisation/
55.‘These Are The 6 Major Cases Where Bank Officials Were Arrested For Corruption And Money Laundering Post Demonetisation’, IndiaTimes dated 10 December 2016, https://www.indiatimes.com/news/these-are-the-6-major-cases-where-bank-officials-were-arrested-for-corruption-and-money-laundering-post-demonetisation-267126.html; ‘Bank fraud: 10 major cases post-demonetisation’ dated 29 December 2016, https://www.abplive.in/india-news/bank-fraud-demonetisation-narendra-modi-kotak-mahindra-hdfc-axis-bank-vaidyanath-cooperative-bank-rbi-income-tax-enforcement-directorate-471783
56.Ex-RBI Governor Reddy was reputed for his intuitive understanding of the financial markets and his long years of experience in economic administration. In his 11 years at the RBI, first as Deputy Governor and then as Governor he saw India through a period of both growth and turbulence. Soft spoken, but fiercely independent, in 2003, when he was offered the top job at the RBI, he refused to sign up for the usual three-year term. He came on board only after Prime Minister Atal Bihari Vajpayee agreed to a five-year term.
57.In an interview to CNBC-TV18 on 9 January 2017, https://www.youtube.com/watch?v=_iHTsqGIJdk
58.Bimal Jalan, after his RBI Governorship, was nominated to the Rajya Sabha. A reputed economist, he was formerly Finance Secretary, President NCAER, and member of the Planning Commission.
59.‘RBI’s Autonomy Is Fundamental, We Have To Maintain It: Bimal Jalan’, Bloomberg Quint dated 10 January 2017, https://www.bloombergquint.com/business/2017/01/10/rbi-autonomy-fundamental-we-have-to-maintain-it-bimal-jalan#gs.KAdYp7g
60.‘“Feeling humiliated” by post-note ban events, RBI employees write to Urjit Patel’, The Times of India dated 13 January 2017, https://timesofindia.indiatimes.com/business/india-business/feeling-humiliated-by-post-note-ban-events-rbi-employees-write-to-urjit-patel/articleshow/56527140.cms; ‘“Humiliated” RBI employees write to Governor Urjit Patel, say bank’s image “dented beyond repair”’, India Today dated 14 January 2017, https://www.indiatoday.in/india/story/reserve-bank-of-india-staff-says-banks-image-dented-beyond-repair-letter-urjit-patel-954902-2017-01-14
61.The four signatories were Samir Ghosh of All India Reserve Bank Employees Association, Suryakant Mahadik of All India Reserve Bank Workers Federation, C.M. Paulsil of All India Reserve Bank Officers’ Association and R.N. Vatsa of RBI Officers’ Association.
62.Addressing a seminar at the eighth Vibrant Gujarat Global Summit in Gandhinagar on 11 January 2017, press reports indicated that Urjit Patel ran down the stairs from the back door to avoid reporters. ‘How the RBI Governor gave a slip to the media’,The Hindu dated 12 January 2017, https://www.thehindubusinessline.com/news/national/how-the-rbi-governor-gave-a-slip-to-the-media/article9473873.ece
63.‘If I Were at RBI, I’d Have Withdrawn From Demonetisation Implementation: Y.V. Reddy’,The Wire dated 14 January 2017, https://thewire.in/banking/yv-reddy-interview-demonetisation
64.‘Urjit Patel: The Five-Year Twist’, Bloomberg dated 12 January 2017, https://www.bloombergquint.com/opinion/2017/01/12/urjit-patel-the-five-year-twist#gs.yLTu_bQ
3 Lessons from History
1.RBI website; Currency Museum. See https://rbi.org.in/Scripts/mc_others.aspx
2.In 2010, a new symbol `was officially adopted as the currency symbol for the Indian rupee.
3.History of the Reserve Bank of India, Volume I, see https://www.rbi.org.in/scripts/RHvol-1.aspx and The Times of India archives at https://timesofindia.indiatimes.com/archive.cms.
4.History of the RBI, Vol. I. p. 707.
5.RBI Web site; Currency Museum; https://rbi.org.in/Scripts/mc_others.aspx
6.History of the Reserve Bank of India, Volume I; Wanchoo Committee report; The Times of India archives; and India Today archives at https://www.indiatoday.in/topic/India-Today-archives; I.G. Patel, Glimpses of Indian Economic Policy: An Insider’s View, India, Oxford University Press, 2002.
7.Tissa Devendra, Tales from the Provinces, Sri Lanka, Sarvodaya Vishva Lekha Publishers, 1998. The Government Agent of Matara, a major city in the South of Sri Lanka, commenting on the Ceylonese Demonetization.
8.Addressing the BJP Parliamentary meeting in December 2016, the PM, Narendra Modi, cited the Wanchoo Committee’s Interim recommendations to claim that what Indira Gandhi did not have the courage to do, he had now done. A year later, at a poll rally in Himachal Pradesh in November 2017, PM Modi defended demonetization, saying that if former prime minister Indira Gandhi had carried out the note ban back in the 1970s, it would not have been necessary in 2016. ‘Had she done note ban when needed, I would not have had to carry out this big task.’ In both instances, he ignored the fact that Prime Minister Morarji Desai, leader of the Janata party coalition government, in which the Jan Sangh was a major constituent, had demonetized the `1,000, 5,000 and 10,000 notes in 1978. When Indira Gandhi returned to power in 1980 and until her assassination in 1984, the `100 note was the highest denomination note in circulation!
9.‘Fact check: Did Indira Gandhi really shy away from demonetisation as Narendra Modi claimed?’, Scroll.in, 12 September 2018, https://scroll.in/article/824703/fact-check-did-indira-gandhi-really-shy-away-from-demonetisation-as-narendra-modi-claimed; ‘Modi’s Defence of Demonetisation Is Based on a Selective Memory’, Nilanjan Mukhopadhyay,The Wire dated 19 December 2016, https://thewire.in/economy/modi-demonetisation-wanchoo-committee
; 10.Kishore C. Samal, ‘Chasing Black Money in India’, Journal of Indian School of Political Economy, vol. 4, no. 2, April–June 1992, pp. 319–29.
11.I.G. Patel, 14th Governor of the RBI, had a formidable intellectual reputation. After his term as Governor of RBI, Patel was appointed to head the Indian Institute of Management, Ahmedabad, and subsequently the London School of Economics.
12.H.M. Patel was an eminent bureaucrat turned politician. An Indian Civil Service officer, Patel rose to become Cabinet Secretary before turning 40, served as Partition Secretary and held several high posts in independent India, including Principal Secretary, Finance. He subsequently joined politics, was the leader of Opposition during the Emergency, and Finance and Home Minister in the Janata Party government.
13.A total of 86.87 crore pieces of `100, 56.19 crore pieces of `500, and 21.75 crore pieces of `1,000 were shredded.
14.George B.N. Ayittey, ‘The Re-Denomination of the Cedi – Caution’, https://www.ghanaweb.com/GhanaHomePage/business/The-Re-Denomination-of-the-Cedi-Caution-118997; Bank of Ghana website, https://www.bog.gov.gh/
15.Daniel G. Mathews, ‘Nigeria 1984: An Interim Report’, CSIS Africa Notes Report, https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/anotes_0284.pdf; Helen Kitchen, U.S. Interests in Africa, New York, Praeger, 1983; Financial Times and The New York Times archives; Article in West Africa dated 24 May 1984 and African Business magazine, October 1993 cited in https://www.ghanaweb.com/GhanaHomePage/business/The-Re-Denomination-of-the-Cedi-Caution-118997
16.Jeffrey Hays, ‘Economic History of Myanmar’, 2008, http://factsanddetails.com/southeast-asia/Myanmar/sub5_5g/entry-3126.html; ‘A Ne Win situation Burma’s three Demonetizations’, LiveMint, dated 28 October 2017, https://www.livemint.com/Sundayapp/LO3bemtSxzcHa2lodLxIDI/A-Ne-Win-situation-Burmas-three-demonetizations.html; ‘Burma’s Military Solution’, Time, 6 September 2007, http://content.time.com/time/world/article/0,8599,1659382,00.html; ‘The Generals Who Would Be Kings’, the Washington Post dated 30 September 2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/09/28/AR2007092801327.html?noredirect=on