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Did it take RBI only three hours to approve demonetization?

The Reserve Bank of India spent only about three hours before approving the demonetization move that took out nearly 86% (in value terms) currency from the country in one go on November 8. The information was revealed by the central bank while replying to a Right To Information filed by Bloomberg News, a report by NDTV said.

The demonetization announcement was made by Prime Minister Narendra Modi in a televised address to the nation at about 8 pm. The public was given four hours to withdraw cash from ATMs before the tenders were to be rendered useless albeit some exceptions, which ensured long serpentine lines outside ATMs. This became commonsight as a cash crunch ensued, lasting weeks.

The RBI said that the decision to make the Rs 500 and Rs 1,000 bank notes illegal was taken at around 530 pm in the November 8 board meeting. However, the break up of members in favour and opposed to the move wasn’t ‘”on record” the RBI said.

The report said that the central bank did not respond to queries about about how many new Rs 2,000 and Rs 500 notes were printed or how long the printing presses were running in the run up to November 8.

The cash crunch situation still persists, with long winding lines and shortage of smaller denomination (Rs 100 and new Rs 500) notes in scarcity. The government’s move to remove Rs 14 lakh crore was first deemed as an initiative to weed out black money and counterfeit currency from the system. The government then shifted goalposts to promoting a cashless, digital economy.

Prime Minister Narendra Modi had sought 50 days ending December 30 to let the pain of demnetization ease. The deadline was also for depositing old Rs 500 and Rs 1000 notes or to get them exchanged at the banks for new acceptable tenders. The last day is tomorrow (Friday) with no concrete information yet in sight if the currency situation is likely to improve or not.