New Delhi, January 9, 2017

RBI Governor Urjit Patel will have a lot to answer when he appears before the Public Accounts Committee (PAC) later this month, with the panel preparing a list of questions on how the decision was arrived at, and the reasons for frequent changes in rules.

The PAC, headed by senior Congress MP K V Thomas, will be seeking clarifications from the RBI and its stand on demonetisation. Patel has been asked to appear before the panel on January 28.

Besides PAC, the Parliamentary Standing Committees on Finance and Subordinate Legislations has also summoned RBI officials, including Patel.

According to sources, the PAC had decided on the information it needed in December, last week, on the decision-making process and involvement of RBI, besides others.

The panel wants to know from the Governor, from where the RBI derived power for issuing restriction on withdrawal from bank accounts, and if there was no laws, why he should not he prosecuted and removed for the abuse of power. It also wants to know, why there were so many changes in RBI regulations, and asked the RBI to provide details of officers who came up with ideas like inking people and marriage-related withdrawal.

The panel also wants an explanation on why the RBI is not providing information under the Right to Information Act.

Patel will also have to convince the panel as to why the demonetisation decision was in India’s best interests. Pointing out that India’s cash-to-GDP ratio was 12% compared with Japan’s 18% and others, the panel will grill Patel about what was so alarming that a decision to demonetise was to be taken suddenly. Amid allegations that the Governing Body meeting of the RBI sang the government’s tune on the issue, the panel will also want to know when were the board members called for the meeting and details of its minutes.

[The Deccan Herald]