Withdrawal of Pre-2005 currency notes - No demonetisation; not related to elections - RBI Governor
YESTERDAY RBI Governor Raghuram Rajan addressed the 8th RN Kao Memorial lecture in the Capital. After his lecture, during the interaction, CBI Director Ranjit Sinha asked him about the significance of RBI's move to withdraw pre-2005 currency notes (Please see yesterday's DDT for details), just before the elections.
The RBI Governor clarified:
This is not an attempt to demonetise. It is an attempt to replace less effective notes with more effective notes. I understand people are making different interpretations. Unfortunately, that should not be the interpretation.
It has nothing to do with elections.
The notes after 2005 have greater security features and the Finance Ministry sought withdrawal of the pre-2005 notes.
The RBI Governor does not understand why people are worried when RBI had asked them not to panic. The problem is that RBI has a Printing Press and the people are not blessed with such divine facility and naturally they will be worried. But it's not ordinary people who are really worried - it's the people sitting on piles of black money who are really worried.