Skip to main content

CIC threat compels RBI to share minutes that rubber-stamped DeMon exercise


By Venkatesh Nayak*
I am placing in the public domain a copy of the meeting minutes of the Board of Governors of the Reserve Bank of India (RBI) which legitimised the Central Government’s initiative to withdraw the legal tender nature of currency notes of Rs. 500 and Rs. 1,000 denomination (also known as demonetisation or DeMon for short) on 08 November, 2016. Readers might remember my earlier despatches about RBI’s stubborn refusal to part with any information about the preparatory stages of this exercise. Readers might also recall my brief analysis of the stark differences between the 2016-17 exercise and the previous such exercise conducted in 1978.
I salute the efforts made by the Indian Express and other media houses which have already reported the contents of RBI’s Board meeting minutes in November 2018- a worthy example of investigative reporting. However, I have not been able to locate a copy of the actual document on the Internet. I am publicly sharing the document containing these minutes so that any citizen or institution may make use of it henceforth.
Click here for a copy of RBI’s DeMon-related meeting minutes.
Click here for the email communication received from RBI’s Central Public Information Officer (CPIO) which is proof that these documents were “neither stolen” nor photocopied without authorisation” but obtained legitimately under The Right to Information Act, 2005 (RTI Act) after a 28-month long wait. Making this declaration at the outset is necessary because this is the season where wild accusations of theft of official documents are being flung at people who are working for greater transparency and accountability of certain very publicly conducted affairs.
Last month, RBI revealed its intention to disclose these minutes at a hearing in my RTI case pending before the Central Information Commission (CIC). CIC issued a penalty show cause notice to the CPIO for the inordinate delay in making a decision in favour of disclosure. This order was widely reported.
Click here for the CIC’s interim order to RBI.
Three days ago, CIC staff informed me telephonically about the cancellation of the next hearing in this case which was scheduled for 08 March, 2019. However, RBI’s CPIO emailed me these minutes the same day. He also shared RBI’s written submissions to the CIC against the grounds cited in my second appeal case. As the CIC might not have examined it yet, I am not sharing those submissions publicly.

Preliminary observations on the contents of the DeMon minutes versus the CPIO’s justification for secrecy

1) The first two queries in my RTI application were for copies of the minutes of the meeting of RBI’s Board of Governors and any recommendation that was submitted regarding the DeMon exercise to the Central Government. The CPIO sent a copy of the minutes of the 561st meeting of RBI’s Board which was held less than five hours before the Hon’ble Prime Minister announced the DeMon decision to the country on television. RBI sent its resolution approving the DeMon exercise to the Government only on 16th December a full 38 days after the Rs. 500 and Rs. 1,000 currency notes stopped being legal tender. So essentially, RBI’s Board had only rubber stamped the Government’s initiative. RBI’s CPIO has sent me this document also.
2) The remaining queries in my RTI application pertain to petitions, recommendations or communication submitted by any person, entity or organisation to RBI regarding demonetisation and all replies that RBI sent to such entities. I had also sought copies of all file notings and correspondence conducted in this regard. RBI’s CPIO continues to deny access to all this information citing Section 7(9) of the RTI Act, without batting an eyelid. Readers will recollect that an RTI application may be rejected only by invoking the exemptions listed under Sections 8 and 9 of the Act. Section 7(9) is meant to facilitate disclosure through some acceptable form if the form of access sought by an RTI applicant cannot be fulfilled. Nevertheless, the CPIO persisted with his line of reasoning at the last hearing before the CIC, held in February 2019.
3) In the first instance, RBI’s CPIO cursorily rejected the first two queries of my RTI application by citing Section 8(1)(a) of the RTI Act. Later, upon the advice of the First Appellate Authority (FAA), the CPIO gave some reasoning.
Click here for my RTI application, CPIO’s replies, my first appeal and the FAA’s order.
In his detailed reasoning as to why the DeMon minutes and recommendation sent to the Central Government cannot be disclosed, the CPIO had stated as follows:
“The documents containing the information pressed for by the appellant in these queries have been examined. The documents reveal factors/modus operandi which preceded a highly sensitive decision of withdrawing the legal tender character of Rs. 500 and Rs. 1,000 bank notes by the Central Government having bearing on the economy of the state. It is reiterated that the information sought relates to vital economic interests of the country which takes in its expanse an array of economic, financial and security factors. data, exchange of opinions etc. of secret nature, disclosure of which would harm more the larger national interest as compared to the interest of an individual. Disclosure is also likely to impede the decision-making processes in the area of future economic and financial policies of the State. In effect it attracts the provisions of the Section 8(1)(a) of the Right to Information Act, 2005, (the Act) and the information sought qualifies for an exemption under this Section.
After careful consideration it is also observed that none of the information available can reasonably be severed from any part that contains exempt information as envisaged in Section 10 of the Act.”
4) A perusal of the DeMon minutes that the CPIO has furnished now, shows that there is hardly any information that can be called “sensitive” in them. The only statistics cited in the DeMon minutes are reproduced below:
a) The Central Government’s letter containing the draft DeMon Scheme drawn up in the Ministry of Finance stated that growth of the bank notes of Rs. 500 and Rs. 1,000 denomination was 76.38% and 108.98% during the period 2011-16 whereas the economy had grown only by 30%. RBI’s Directors disagreed with this reasoning and responded that the growth rate of the economy was the real rate whereas growth in currency circulation was nominal and when adjusted for inflation did not constitute any stark difference.
b) RBI disagreed with the Revenue Dept.’s finding that the shadow economy for India (where black money transactions do not leave an audit trail) was estimated at 20.7% of GDP in 1999 and had risen to 23.2% in 2007 (based on World bank estimates). It is interesting that the DeMon minutes do not mention the black money reports submitted by NIPFPand two other research institutions. My formal request for copies of these reports was rejectedunder the RTI Act.
The Union Finance Minister has recently made a curious statement in Parliament that black money study reports may be made available to MPs who sit on the Department-related Parliamentary Committee on Finance, but will not be placed in the public domain. The Government seems to have ignored the proviso underlying Section 8(1) of the RTI Act which contains the noble democratic principle that information which cannot be denied to Parliament or State Legislature cannot be denied to a citizen. To hold that information may be provided to certain MPs but not to the people who sent them to Parliament is perplexing to say the least.
c) RBI’s Directors opined that most of the black money is not held as cash but in the form of real-sector assets such as gold or real estate and that DeMon would not have any material impact on those assets.
d) RBI’s Directors rejected the Government’s concern that an estimated Rs. 400 crores of counterfeit currency in circulation was significant as a percentage of the total quantum of currency in circulation. The Directors also noted that DeMon will impact negatively on the GDP in the short term.
5) What were the compelling factors that justified DeMon which took the lives of more than a hundred citizens who stood outside banks to exchange their currency notes and scores of bankers who collapsed counting them and have had well documented negative impact on various sectors of the economy which is still unravelling? RBI’s DeMon minutes are strangely silent on this matter.
6) At para #4.3(i), it is mentioned that the Board found the measure commendable, but there is no reasoning provided for this commendation anywhere in the minutes. At para #4.4 there is a vague mention that DeMon will help achieve financial inclusion. How will criminalising possession of the DeMon currency beyond the grace period, lead to financial inclusion is not explained anywhere.
7) What is interesting is that the DeMon minutes do not contain any sensitive information such as factors, data or exchange of opinion about financial and economic security. Nothing in the documents that I have received indicates that any portion of it has been severed under Section 10 of the RTI Act to remove sensitive information. So the CPIO’s reasoning which was bandied about between 2016-2017 as the basis for rejecting the RTI application is simply not borne out by the contents of the document.
8) The Board also stated that DeMon will help incentivise use of electronic modes for making payments instead of cash. Opinion on whether increased use of electronic modes of payment was due to DeMon is divided. RBI’s own recent reports present a contradictory picture.While e-transactions have grown manifold there is more cash circulating in the economy than there was on the date of demonetisation. So on what basis did RBI make its assumption on 08 November 2016, is not revealed in the DeMon minutes.
9) Interestingly, the DeMon minutes reveal that a Deputy Governor of RBI was working with the Central Government on the initiative to withdraw legal tender of the Rs. 500 and Rs. 1,000 currency notes, for six months. But his name is not mentioned anywhere in the minutes. The language of para #4.4 of the minutes seems to indicate that the Board was simply not aware of this planning prior to the tabling of the Deputy Governor’s memorandum on the subject at its meeting less than six hours before the Hon’ble Prime Minister announced the decision to the country.
Meanwhile, I am looking forward to the next date of hearing to battle it out for the remaining information I have sought in my RTI application.

*Programme Head, Access to Information Programme, Commonwealth Human Rights Initiative, New Delhi

Comments

TRENDING

Eight years of empowering tribal communities through water initiatives in Chhattisgarh

By Gazala Paul*   In the heart of Chhattisgarh, amidst the echoes of tribal life, a transformative journey has unfolded over the past eight years. The Samerth organization has diligently worked to elevate the lives of indigenous communities in the Kawardha district through the project, "Enabling Baiga Community to access safe drinking water." 

Towards 2024: Time for ‘We the People of India’ to wake up before it is too late

By Fr Cedric Prakash SJ*  It is Constitution Day once again! We, the people of India, gratefully remember 26 November 1949 when the Constitution of India was passed and adopted by the Constituent Assembly. The Constituent Assembly comprised women and men of distinction, who were able to represent the heart and soul of the people of India without fear or favour. They gave of their best, so that we may a visionary Constitution, which would be the mainstay for and of democracy in India!

Regretful: Kapil Dev retired not leaving Indian cricket with integrity he upheld

By Harsh Thakor  Kapil Dev scaled heights as an entertainer and a player upholding the spirit of the game almost unparalleled in his era. In his time he was cricket’s ultimate mascot of sportsmanship On his day Kapil could dazzle in all departments to turn the tempo of game in the manner of a Tsunami breaking in. He radiated r energy, at a level rarely scaled in his era on a cricket field. Few ever blended aggression with artistry so comprehenisively. Although fast medium, he could be as daunting with the ball as the very best, with his crafty outswinger, offcutter, slower ball and ball that kicked from a good length. Inspite of bowling on docile tracks on the subcontinent, Kapil had 434 scalps, with virtually no assistance. I can never forget how he obtained pace and movement on flat pancakes, trapping the great Vivian Richards in Front or getting Geoff Boycott or Zaheer Abbas caught behind. No paceman carried the workload of his team’s bowling attack on his shoulders in his eras muc

Critical factors that determine, contribute to the success and effectiveness of NGOs

By Rohit Rakshit  Over the last few years, I have been fortunate to work with numerous non-governmental organizations (NGOs) across various states in the country. This experience has allowed me to gain insights into their diverse areas of work while also enabling me to analyze the key attributes that contribute to the success of a good NGO. According to my observations, the following are the critical factors that determine the effectiveness of an NGO.

How the slogan Jai Bhim gained momentum as movement of popularity and revolution

By Dr Kapilendra Das*  India is an incomprehensible plural country loaded with diversities of religions, castes, cultures, languages, dialects, tribes, societies, costumes, etc. The Indians have good manners/etiquette (decent social conduct, gesture, courtesy, politeness) that build healthy relationships and take them ahead to life. In many parts of India, in many situations, and on formal occasions, it is common for people of India to express and exchange respect, greetings, and salutation for which we people usually use words and phrases like- Namaskar, Namaste, Pranam, Ram Ram, Jai Ram ji, Jai Sriram, Good morning, shubha sakal, Radhe Radhe, Jai Bajarangabali, Jai Gopal, Jai Jai, Supravat, Good night, Shuvaratri, Jai Bhole, Salaam walekam, Walekam salaam, Radhaswami, Namo Buddhaya, Jai Bhim, Hello, and so on.

Martin Crowe played instrumental role in making New Zealand a force in world cricket

By Harsh Thakor* Late Martin Crowe was the perfect manifestation of how mere figures could not convey or do justice to the true merit of a batsman. Crowe was arguably the most complete  or majestic batsmen of his era or the ultimate embodiment of batting perfection, or the classical batsmen. He perished 7 years ago, due to a rare and aggressive form of cancer, follicular lymphoma, which originated in 2012. In September, we celebrated his 60th birthday but sadly he left for his heavenly abode.

Raising temperature of frozen foods by 3 degrees from -18°C to -15°C can slash carbon emissions: Study

By Payel Sannigrahi  Frozen food temperatures could be changed by just three degrees to save the carbon dioxide emissions of 3.8 million cars per year, research suggests. 

Odisha leadership crisis deepens: CM engages retired babus to oversee depts' work

By Sudhansu R Das  Over decades, Odisha has lost much of its crop diversity, fertile agriculture land, water bodies, employment potential, handicraft and handloom skills etc. The state has failed to strike a balance between the urban and rural sector growth; this leads to the migration of villagers to the urban areas leading to collapse of the urban infrastructures and an acute labor shortage in rural areas.  A large number of educated, skilled and unskilled Odia people have migrated to other states for higher education, quality jobs and for earning livelihood which plummet the efficiency level of government departments. Utmost transparency in the recruitment and promotion in the state government departments will improve governance mechanisms in the state.  "No near and dear one approach" in governance mechanisms can only achieve inclusive growth for the state on payment basis. This is a moral hazard. When so many educated young people seek employment outside the

1982-83 Bombay textile strike played major role in shaping working class movement

By Harsh Thakor  On January 18th, 1982 the working class movement commemorated the 40th anniversary of the Textile Workers Strike that lasted for 18 months, till July 1983. It was landmark event that played a major role in shaping the working class movement. With more than 2.5 lakh workers from 65 textile mills joining in this strike for almost two years, this strike became one of the most significant strikes in terms of scale and duration All democrats should applaud the mill workers’ united battle, and their unflinching resilience an death defying courage continues to serve as a model for contemporary working-class movements. Many middle class persons harboured opinions that the Textile workers were pampered or were a labour aristocracy, ignorant of how they were denied wages to provide for basic necessities. The Great Bombay Textile Strike is notably one of the most defining movements in the working class struggles in Post-independent India. Bombay’s textile industry flourished in

Ceasefire a tactical victory for Palestinian resistance, protests intensify across globe

By Harsh Thakor*  The Zionist leadership and Netanyahu’s government were compelled to concede the defeat of their first attempt after almost 50 days of daily fighting in the Gaza Strip.  Netanyahu was forced to concede that he was unsuccessful in suppressing the Palestinian Resistance; and that the release of the prisoners was only plausible because they accepted Hamas’ terms.