One is amazed to read the news that Government is planning to change RBI Act now which will allow the central bank to annul the Rs 500 and Rs 1000 notes, In other words, one first uses the RBI Act to declare the existing series (whereas RBI Act just allowed any series) and now looks to change the RBI act to allow this to happen. I mean what is going on really?
Anyways, here is another piece by Namita Wahi of ET which argues that demonetisation notification is illegal and violates the constitution. There is a reason why RBI’s former top officials and other legal experts should throw more clarity on the issue. There is too much focus on economic consequences but it is legal issues that matter much more.
It is equally amazing to note that large section of markets and experts opined that RBI maintained its independence in the recent policy meeting. Really? Instead of asking central bank tough questions during the policy meet, the media just let things be.