Manmohan Singh saves Urjit Patel from grilling, says RBI governor should not be put to odd questions

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New Delhi | Published: January 18, 2017 8:18:52 PM

Reserve Bank Governor Urjit Patel today escaped possible grilling by a parliamentary committee over the demonetisation issue but for the intervention of former Prime Minister Manmohan Singh.

RBI Governor Urjit Patel is also scheduled to appear before the Public Accounts Committee of Parliament on the same issue on January 20. (Reuters)RBI Governor Urjit Patel is also scheduled to appear before the Public Accounts Committee of Parliament on the same issue on January 20. (Reuters)

Reserve Bank Governor Urjit Patel today escaped possible grilling by a parliamentary committee over the demonetisation issue but for the intervention of former Prime Minister Manmohan Singh. Patel, who along with other RBI and finance ministry officials appeared before the Parliamentary Standing Committee on Finance, was put to some tough questions by members, sources in the committee said.

He could not reply to questions like when normalcy would be back in the banking system and how much of demonetised currency was deposited during the 50-day window.

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Before further grilling could start, Singh, who made a forceful speech against demonetisation in Rajya Sabha calling it a “monumental failure and organised loot”, intervened to say that the central bank and the Governor’s position as an institution should be respected.

He should not be put to odd questions, Singh, who himself was RBI Governor once, is believed to have told the Committee.

Singh is understood to have told Patel that he need not answer a question put by one of the members relating to non-removal of cash withdrawal restrictions.

Bankers including Chanda Kochhar (ICICI Bank) and Usha Ananthasubramanian (Punjab National Bank) also appeared before the panel.

The RBI Governor is also scheduled to appear before the Public Accounts Committee of Parliament on the same issue on January 20.

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In a surprise move on November 8, Prime Minister Narendra Modi had announced demonetisation of old Rs 500 and Rs 1,000 notes.

Following the decision, the RBI had put restrictions on withdrawal of cash from ATMs as well as from banks to deal with shortage of new high denomination currency notes. This led to long queues at ATMs and bank branches.

All over the country, the banks had to deal with huge rush of people who thronged their branches to deposit junked
notes. The deadline for depositing old notes with banks ended on December 30.

The cash situation has improved gradually with supply of new Rs 500 and Rs 2,000 notes. Yesterday, the RBI increased the daily withdrawal limit from ATMs to Rs 10,000 but kept the weekly ceiling at Rs 24,000.

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