RBI Chief Urjit Patel breaks his silence on Demonetisation

Three weeks past the Demonetisation announcement, there is a common understanding that people have become partially accustomed to the situation. Hearing about demonetisation all over media all over day and night, public has digested the historic move. The markets have already discounted the demonetisation move. Having bottomed out to the lowest level, market’s response to demonetisation is already sufficed.

With new guidelines announced for every new day ,provision for exchange of banned notes completely abandoned and economy facing cash crunch,  public questioned government’s preparedness in regard to Demonetisation. The media also surfaced critical comments after frequent changes to the policy. However,initially, it backed the government’s decision . To add to the dilemma , RBI’s chief continuing mum on the matter attracted a lot of criticism. However, RBI  chief, Urjit Patel broke his silence to eased the scenario.

Amidst the chaos and bafflement ,Reserve Bank of India Governor Urjit Patel on Sunday said the RBI is taking the “required decisions to ease the genuine pain of citizens who are honest and have been hurt”. Patel said, “the situation is getting better with things stabilising in the metros”. Moreover,he confessed that remote locations are “still feeling some pain”.

Patel said, “Liquidity in the banking system has increased and so credit should be becoming more easily available. The intent is to normalise as soon as possible.” On the need for demonetisation, he said, “people were holding high denomination notes to keep tax unaccounted for money. Some sectors like real estate were using cash to avoid tax”. Patel also expresses his belief that the interest and tax rates will slash down .

On the lines of Prime Minister Modi’s statement, Patel too suggested  to move towards Cashless economy. He insisted on the use of Digital modes of transaction, emphasizing that such payment options are cheaper and seamless .