Objective behind centre’s note ban still unclear: Ex-RBI chief

No one knew as to how much black money exists in the country and the estimated figures were apparently not correct.​

Published: 05th January 2017 04:55 AM  |   Last Updated: 05th January 2017 04:55 AM   |  A+A-

By Express News Service

VIJAYAWADA  : The objective of demonetising the high-value currency notes is not yet clear and remains a puzzle for the economists of the country, former RBI Governor Duvvuri Subbarao has said. He strongly felt that the Centre should give clarity on the objective behind demonetisation.

Addressing a panel discussion on ‘The Role of Reserve Bank of India (RBI) in Demonetisation’, organised during the ongoing 28th annual book festival here on Wednesday, Subbarao recalled that the Centre initially stated that the note ban was aimed at curbing counterfeit currency.

However, sometime later, it announced that the move was targeted at black money, which existed in Rs 500 and Rs 1,000 denomination. Again, it avowed that demonetisation was aimed to tackle terrorism and then said, it was meant to promote cashless economy. “In all, there is no clarity in the Centre’s statements regarding demonetisation,” he pointed out.

“The role of RBI is not only to print and issue currency, but its primary responsibility also is to control inflation, improve the growth rate and maintain financial stability in the country,” Subbarao asserted.

No one knew as to how much black money exists in the country and the estimated figures were apparently not correct. The financial experts, too, had no clue with 86 per cent of currency in circulation being declared as invalid. Since this happened for the first time in the country, everyone started learning and understanding the dynamics of the ‘November 8 announcement’,” Subbarao noted.

“Though India is lagging behind in cyber security aspects and moving ahead with weak financial payment gateways, the RBI is regularly monitoring the financial payment gateways and ensuring security, now that people are more worried about the safety of their hard-earned money in this digital world,” he said.

Andhra Pradesh State Planning Board Vice-Chairman C Kutumba Rao felt that demonetisation was a positive step taken to eliminate black money and also to increase transparency in governance. 


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp