January 7, 2017 2:27:11 am
The Parliamentary Committee on Subordinate Legislation on Friday grilled top officials of the Reserve Bank of India, including Governor Urjit Patel, and top banks about the demonetisation of Rs 500 and Rs 1000 notes, especially the problems faced by people and its implementation.
Apart from Patel, RBI Deputy Governors, NS Vishwanathan and R Gandhi and top bankers including SBI chairman Arundhati Bhattacharya and ICICI Bank MD & CEO Chanda Kochhar were present in the first meeting of a parliamentary panel on the issue. “It was confrontational but still it was constructive,” said a source who attended the meeting.
“We raised issues about demonetisation and how they coped with it… what’s the impact, the problems in implementation, the problems faced by the banking sector and how to fix all that. Our job is to raise questions. Their job is not to answer them. There were so many questions and one or two of them got answered. Many questions did not get addressed,” said the source who preferred anonymity. Patel was present for nearly two hours at the meeting. About eight members of the panel were also present.
“People asked questions about the planning that went into this and the decision-making process. All these did not get answered. Questions were asked about the accounting of notes. A member also asked him why at the crucial time information was not shared,” said a member of the panel who attended the meeting.
“A member pointed out stories of corruption coming out. The RBI as the banking regulator needs to step up and do something. The members also asked how the demonetisation decision was taken on November 8. That question was asked. It was a constructive dialogue. What are you doing about this? Why don’t you change this? We asked probing questions,” said a member. “Many questions were not answered due to paucity of time. We trumped it a failure at least on the implementation side.” However, one of the Deputy Governors said, “please don’t call it a failure.”
This is the first of a series of a parliamentary panel meetings where the RBI Governor will have to appear. The Finance Committee and the Public Accounts Committee are also calling him.
On RBI’s independence, a member said, “this question was asked… how important it’s to maintain the independence of the RBI. For example the finance minister said not all money will be remonetised. But that should be the decision of the RBI, not the finance minister. Are you making the decision or the finance minister is taking the decision.” However, Patel apparently said, “you are interpreting the finance minister’s statement in a different way.”
“This is not a judicial probe. We were raising the pain of people on different issues and bringing issues to their attention. The members also disputed the RBI’s contention of the currency in circulation. Maybe the number of notes may be same but not the the value of notes,” the source said.
Bankers tried to defend against the charges of corruption in the system, saying they caught corruption cases and reported them to the concerned authorities. “They said they have good procedures. What you have caught is only a small portion. There’s a much bigger rot in the system. It has to be fixed. If Rs 3 lakh crore of black money has been converted into white, it could not have happened without the connivance and collusion with banks,” said a member at the meeting.
The Committee consists of 15 members nominated by the Speaker. The committee scrutinises and reports to the House whether the powers to make regulations, rules, sub-rules, by-laws etc. conferred by the Constitution or delegated by Parliament are being properly exercised by the executive within the scope of such delegation.
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