Disclosing Reasons for Demonetisation Will Hurt India, Says RBI

Refusal to disclose reasons for the demonetisation decision does not stand up to legal scrutiny, RTI experts say.

golden rbiNew Delhi: It’s time to call it the Reserved Bank of India.

Fifty days after the board of India’s central bank voted to discontinue all Rs 500 and Rs 1000 notes and the prime minister announced the demonetisation of 86% of India’s cash stock,  the Reserve Bank of India has said the reasons for the sudden announcement cannot be made public.

In response to a Right to Information request, the RBI refused to disclose the reasons behind the decision to demonetise around Rs. 16 lakh crore of currency in the country, citing Section 8(1)(a) of the Right to Information Act.

The exemption under this section allows a public authority to withhold “Information, [the] disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign state or lead to incitement of an offence.”

While denying the information sought in the RTI application, the RBI did not explain how this exemption would apply in the given case as the decision to demonetise has already been taken and there is no way that disclosure of information about the reasons would fit any of the reasons cited in section 8(1)(a) of the RTI Act.

The monetary policy authority also refused to give any details about the time it will take to replenish the old currency notes.

“The query is in the nature of seeking future date of an event which is not defined as information as per Section 2(f) of the RTI Act,” RBI said in response to an RTI query.

The RBI’s refusal to disclose the reasons for the demonetisation decision does not stand up to legal scrutiny, RTI experts say.

“In the present case, the information sought does not attract any exemption clause,” former Central Information Commissioner Shailesh Gandhi told PTI. He said the law is very clear that when a public authority rejects disclosure of information, it must give clear reasons as to how the exemption clause would apply in the given case.

Recently, the RBI refused to allow access to minutes of meetings held to decide on the issue of demonetisation of Rs. 1000 and Rs. 500 notes announced by Prime Minister Narendra Modi on November 8.

Responding to an RTI application filed by activist Venkatesh Nayak, the RBI refused to disclose the minutes of the crucial meetings of its central board of directors on the issue of demonetisation, again citing section 8(1)(a) of the transparency law.

Nayak said he will appeal against the decision, adding, while confidentiality prior to the making of the demonetisation decision is understandable, continued secrecy after the implementation of the decision is difficult to understand when crores of Indians are facing difficulties due to the shortage of cash in the economy.

He said the refusal to disclose the minutes of the board meeting where the decision was taken is perplexing to say the very least.

Gandhi also underlined that the RBI has created an in-house “disclosure policy” which is against the letter and spirit of the RTI Act. He has also filed a complaint before the Central Information Commission against the RBI for adopting the policy.

With inputs from PTI