Decision to demonitise taken in May in complete secrecy
11 Nov 2016
The decision to demonetise high value notes of Rs500 and Rs1,000 was taken in early May this year, but the process took almost six months to implement.
The proposal received prime Minister Narendra Modi's go-ahead during a meeting between officials of the Prime Minister's Office (PMO) and the finance ministry. But the cabinet was not aware of the move and the PM's team was informed of what was to come only shortly before Tuesday's announcement.
The purpose of the secrecy surrounding the move was simple, sinc ethe stated purpose of the decision was to curb black money and Any leak would have tipped off unaccounted cash holders and defeated the purpose of the whole exercise.
To ensure this, very few bureaucrats and officials in the PMO, the North Block and Mint Road knew of the plan in its entirety. These were the senior-most and the most trusted, including some secretaries and deputy governors. For other officials, all information was shared on a need-to-know basis.
Only 10 people had been aware of the decision throughout most of the six-month period it took to implement it. One of them was former Reserve Bank of India governor Raghuram Rajan.
As the RBI got down to printing the new notes, it also ramped up production of notes of smaller denominations. Further, banks were also told by the RBI, through a circular issued on 5 May, to dispense more Rs100 notes from their respective ATMs across the nation.
