RBI reveals the reason behind the decision of Demonetization

New Delhi, January 12: Already we know that, Prime Minister Narendra Modi had announced the demonetization of old Rs.500 and Rs.1000 notes since November 8.There were many suspects behind the decision of demonetization.Recently, RBI has clarified about this decision.

RBI says that ,"The complete decision of demonetization is made by the central government.On 7th November 2016, Govt. advised the Reserve Bank that to mitigate the triple problems of black money, terrorism and fake currency.The Central Board of the Reserve Bank may consider withdrawal of the legal tender status of the notes in high denominations of Rs 500 and Rs 1,000”.

The reports quoted from a seven-page RBI note submitted on December 22 to the Parliament’s Department Related Committee of Finance headed by Congress leader M Veerappa Moily.There have been widespread reports of the usage of Fake Indian Currency Notes (FICN) for financing of terrorism and drug financing.

After Prime Minister Narendra Modi’s November 8 address to the nation in which he announced the decision to scrap Rs 500 and Rs 100 notes thus removing 86% of the country’s currency in circulation in one go, Power minister Piyush Goyal had told Rajya Sabha that the decision to demonetize was taken by the RBI board.