Second House panel to question RBI guv Patel on cash crunch
MUMBAI: The Public Accounts Committee (PAC), which is probing the government’s decision to scrap high-value banknotes, has sent RBI governor Urjit Patel a list of questions on the demonetisation process and asked him to appear before it on January 20.
The PAC has asked Patel to explain how the decision for demonetisation was taken and for details on its impact on the economy, KV Thomas, the chairman of the committee, said.
Patel, under fire from some quarters over shortages of replacement currency and restrictions on depositing old notes that have caused long queues at banks and ATMs, is already set to testify before another parliamentary panel.
Last month, the Reserve Bank of India (RBI) unexpectedly kept its key policy rate unchanged at 6.25%, despite calls for action in the face of an intense cash short- age that threatens to slam the brakes on the world’s fastestgrowing large economy. The bank was widely expected to cut the repo rate — the rate at which RBI lends to banks — by at least 25 basis points.
The PAC has asked Patel to provide details on the value of currency that has been returned to the bank, the quantity of “black money” it has received and the amount of new currency released so far, Thomas said.
Patel has also been asked about the country’s preparedness to handle cashless transactions, he added. “We had decided to call the RBI governor sometime in December but because the Prime Minister had asked for 50 days, we decided to postpone it to sometime January. We did not want to give it a political colour.”
Apart from Patel, the PAC has also called other finance ministry officials, including revenue secretary Hasmukh Adhia and finance secretary Ashok Lavasa, Thomas said.