Former finance minister P. Chidambaram on Monday said the Reserve Bank of India had given “foolish” reasons for the withdrawal of the Rs 2,000 notes because it had to rationalise the “foolish” decision to introduce it.
“We totally disagree with the RBI explanation. It gave two reasons for the introduction and withdrawal of the Rs 2,000 note,” Chidambaram said at a news conference in Mumbai, held as part of the Congress campaign to highlight the Narendra Modi government’s failures.
"They said it was necessary to introduce it to meet the immediate requirements. But within 15 to 30 days of the introduction of the Rs 2,000 note, nobody was willing to use it. No shopkeeper accepted it. When the bank cashier gave a Rs 2,000 note, people returned it, asking for 100-rupee notes.”
The Rs 2,000 note was introduced immediately after the November 2016 demonetisation of Rs 1,000 and Rs 500 notes.
“More than 50 per cent of the 2,000-rupee notes never came to the people; it remained in the bank vaults. People didn’t accept it,” Chidambaram said.
Chidambaram said: “The reason for the withdrawal given by the RBI was that the shelf life of the 2,000-rupee note is four to five years. (But) the Rs 2,000 note barely changes hands once a day. What is the shelf life of the 100 or 50-rupee note that changes hands a hundred times every day? You don’t withdraw the note. It is a complete failure of the government. It was a foolish move. And the RBI is giving a foolish reason.”
Chidambaram said the RBI was not willing to accept that it had been foolish to introduce the note in the first place.
“Which country introduces a note and withdraws it? In America, the 100-dollar note is over 100 years old. In Britain, the 50-pound note must have been there for 100 years,” he said.
“The Modi government (re)introduced the 500-rupee note within months of the demonetisation. Don’t be surprised if they re-introduce the 1,000-rupee note. But this introduction-withdrawal affects the integrity and stability of our currency. This is not the way to manage currency. What’s going on?”