Finance Minister Arun Jaitley has said that a series of consultations on the issue of demonitisation were held between the government and top Reserve Bank of India (RBI) officials since February, 2016. He also said that only after that the central bank Board took a formal decision and conveyed it to the government, which then took the final call to go ahead with the move.
The Minister has stated that 8 out of 10 directors of the RBI board were present at the November 8 meeting which made an independent final recommendation with regard to note ban to the government. He also said that in the month of May 2016, the board had decided to approve the design of the new notes and taken the decision with regard to the high-denomination currency which was required to be printed as a replacement currency itself.
Jaitley further said that thereafter a series of meetings used to be held periodically, where the senior officers in the RBI as also in the government were in consultation. He also said that because the decision had to be kept in utmost secrecy, it is for this particular reason that these were not put into public domain. FM noted that RBI had started printing the new currency notes in advance and had adequate currency available but it was the process of recalibration of ATMs that took time. He added that recalibration could not be done in advance for reasons of secrecy.
On the overall impact of demonetization as assessed by government, Jaitley said that remonetisation was at a fast pace and steps were being taken by the government to make sure that the hardship caused to the people is the least. And that is why a series of steps were announced including relaxation in terms of dealing with old currency so that some of the sectors do not suffer at all. He also said that the government has been making an analysis and the government is conscious of the fact that there are in the medium term and long term several advantages in term of expansion of the formal sector of the economy itself.