‘DID RBI INFORM GOVERNMENT OF IMPACT ON CIRCULATION?’
The Supreme Court on Friday asked the central government if the Reserve Bank of India (RBI) had informed it that demonetisation will result in the withdrawal of over 86% currency in circulation.
Making a query to the Centre as part of its consideration of a bunch of petitions challenging the November 8, 2016 notification, a five-judge Constitution bench said, “Did the RBI inform Government that 86.4% currency would be withdrawn from circulation? This was an enormous action.”
Under the RBI Act Section 26(2), a recommendation by the RBI’s Central Board precedes any decision to demonetise any series of currency notes.