RBI puts up a firewall on Demonetisation

Why were ₹1,000 and ₹500 notes demonetised by the government?

Fifty days after the government announced that these notes would cease to be legal tender, Reserve Bank of India feels that the reasons behind the sudden announcement cannot be made public.

The monetary policy regulator also refused to give any details about the time it will take to replenish the 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 central bank refused to disclose reasons behind the demonetisation of about Rs 20 lakh crore of currency in the country citing Section 8(1)(a) of the Right to Information Act which states, “Information, 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."

The RBI did not give any reason as to how exemption would apply in the given case as the decision was already taken and there was no way that disclosure of information could have attracted any of the restrictions mentioned in the section.

"The clause of public interest would apply where exemption clause applies on the information sought by an applicant. In the present case, the information sought does not attract any exemption clause," former Central Information Commissioner Shailesh Gandhi told PTI.

He said law is very clear that when a public authority rejects to disclose an information it must give clear reasons as to how the exemption clause would apply in the given case.

Gandhi, who too has filed a complaint before the Central Information Commission against RBI for adopting the policy, pointed out that RBI has created an in-house "disclosure policy" which is against the letter and spirit of the RTI Act.

Recently, RBI had refused to allow access to minutes of meetings held to decide on the issue of demonetisation of ₹1,000 and ₹500 notes announced by Prime Minister Narendra Modi on November 8.

Responding to an RTI application filed by activist Venkatesh Nayak, RBI also refused to disclose the minutes of the crucial meetings of Central Board of Directors on the issue of demonetisation 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.