Lot of noise was made regarding this RBI Governor appearing before a Parliamentary committee yesterday (another one tomorrow). It was called as grilling and what not. But in the end it just turned out to be a damp squib as RBI just refused to answer most of the questions.
Reserve Bank of India (RBI) governor Urjit Patel on Wednesday deposed before the parliamentary standing committee on finance, but failed to answer most of the questions raised by members of the committee, according to a person who attended the meeting.
The only new piece of information Patel provided is that Rs9.2 trillion worth of currency was injected into the economy after the 8 November ban on high-value currency notes.
However, Patel did not answer how much of the Rs15.44 trillion worth of demonetized money has returned to the central bank, holding that counting of old currency notes is still going on.
RBI has not released any fresh data after the finance ministry’s objection.
“When asked by when this number will come out in the public domain or whether RBI could share it with the standing committee, there was no definite answer,” said the person cited above, a member of the standing committee present at the meeting. The person requested anonymity.
“On the question of how long the restrictions on withdrawal of money from people’s own accounts will remain, there was no clear-cut answer. The only answer given was that providing money is not a problem,” the person said.
Much ado about nothing.
The only highlight was former PM who was also former Governor of RBI protecting his successor. He requested the members to be polite and even suggested not answering one question.
When an MP asked the RBI governor whether the banking system would collapse if restrictions on the withdrawal of money are removed, former prime minister Manmohan Singh, who is also a member of the standing committee, intervened—the only time he did during the meeting—and advised Patel that he need not answer the question.
Any answer to this question hints towards bank runs and best avoided.
Apart from Patel, the meeting was attended by economic affairs secretary Shaktikanta Das, banking secretary Anjuly Chib Duggal and revenue secretary Hasmukh Adhia. Bankers including Chanda Kochhar of ICICI Bank Ltd and Usha Ananthasubramanian of Punjab National Bank also appeared before the committee, which is headed by senior Congress leader Veerappa Moily.
Given the decision and its outcomes, these meeting should have been telecasted live and written statements uploaded on website. We don;t even have RBI chief’s statement on RBI website. In all this talk about transparency, the main things are hidden from public.