2 years of demonetisation: RBI board rejected centre's claim on black money and fake notes, says report

Just four hours before the televised announcement of demonetisation by Prime Minister Narendra Modi, the central board of Reserve Bank of India had approved the scheme, barring two key justifications – black money and counterfeit notes, reported The Indian Express.

The minutes of the 561^st RBI’s central board meeting which was called hurriedly around 5.30 pm on November 8, 2016 reveal that the move was described “commendable” but also warned that it will have a negative impact on the gross domestic product (GDP) of the current year, the report said.

The RBI directors, after receiving a proposal from the finance ministry on November 7, 2016 argued that the centre’s reasoning on the withdrawal of high denomination currency notes of Rs 1,000 and Rs 500 would help curb black money and restrict the circulation of counterfeit cash, did not hold good.