Rajan had been opposed to the concept of demonetisation

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Rajan had been opposed to the concept of demonetisation

Banning Rs 500 and Rs 1,000 Notes Not Feasible: RBI in March 2016

Prime Minister Narendra Modi’s controversial policy of demonetisation has raised several issues in the Parliament, as the Opposition protests the currency ban.
It’s no secret that former Reserve Bank of India governor, Raghuram Rajan, was opposed to the idea of demonetisation. But a letter, dated as late as 15 March 2016, put on paper the RBI’s unambiguous stance on the currency ban.

RBI’s letter (undersigned General Manager) to convener of Anti-Land Grabbing Action Committee.
RBI’s letter (undersigned General Manager) to convener of Anti-Land Grabbing Action Committee.
The RBI, under Rajan, was of the view that banning Rs 500 and Rs 1,000 notes would not be feasible as they constitute “85 percent of the value of notes in circulation”.
Ideologically, too, Rajan had been opposed to the concept of demonetisation. While he has not commented on the government’s current decision, in 2014, Rajan, in a public lecture, questioned the effectiveness of demonetisation.
Unfortunately, my sense is the clever find ways around it. They find ways to divide up their hoard into many smaller pieces. You do find that people who haven’t thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetisation. It is not that easy to flush out the black money. 

Banning Rs 500 and Rs 1,000 Notes Not Feasible: RBI in March 2016

Prime Minister Narendra Modi’s controversial policy of demonetisation has raised several issues in the Parliament, as the Opposition protests the currency ban.
It’s no secret that former Reserve Bank of India governor, Raghuram Rajan, was opposed to the idea of demonetisation. But a letter, dated as late as 15 March 2016, put on paper the RBI’s unambiguous stance on the currency ban.

RBI’s letter (undersigned General Manager) to convener of Anti-Land Grabbing Action Committee.
RBI’s letter (undersigned General Manager) to convener of Anti-Land Grabbing Action Committee.
The RBI, under Rajan, was of the view that banning Rs 500 and Rs 1,000 notes would not be feasible as they constitute “85 percent of the value of notes in circulation”.
Ideologically, too, Rajan had been opposed to the concept of demonetisation. While he has not commented on the government’s current decision, in 2014, Rajan, in a public lecture, questioned the effectiveness of demonetisation.
Unfortunately, my sense is the clever find ways around it. They find ways to divide up their hoard into many smaller pieces. You do find that people who haven’t thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetisation. It is not that easy to flush out the black money. 



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