At 8 in the night of November 8, well after all the banks in the country had closed, Prime Minister Narendra Modi had rattled millions of Indians by suddenly announcing that all Rs 500 and Rs 1000 notes would cease to remain legal tenders from midnight.
Asked why he chose to give the nation no time to adjust to the impending massive cash crunch, the PM and all his senior ministers had argued that the decision had to be kept a secret till the last moment to take the black money holders and also terrorists by surprise.
The decision was kept so heavily under the wraps that even his ministers reportedly had no knowledge of it till the PM told them during an emergency cabinet meeting minutes before his public announcement.
A careful scrutiny of the notification issued by the Finance Ministry, however, raises severe doubts about the government’s claim of secrecy. The notification itself shows that several private businessmen, who are members of the Central Board of Directors of the Reserve Bank of India knew that the government would ban 500 and 1000 rupee notes from the midnight of November 8.
The notification issued by the Ministry of Finance (Department of Economic Affairs) on November 8 states, “Whereas, the Central Board of Directors of the Reserve Bank of India (hereinafter referred to as the Board) has recommended that bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees (hereinafter referred to as specified bank notes) shall be ceased to be legal tender…… Now, therefore, in exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934 (2 of 1934) (hereinafter referred to as the said Act), the Central Government hereby declares that the specified bank notes shall cease to be legal tender with effect from the 9th November, 2016..” http://finmin.nic.in/172521.pdf
The key words in the notification are: the Central Board of Directors of the Reserve Bank of India (hereinafter referred to as the Board) has recommended..
The Central Board of the RBI is comprised of 21 individuals of whom 4 are mandated to be from the private sector. (Sections 8, 9 and 10 of the RBI Act).
Though the website of the RBI does not list out all of the directors of its Central Board, it does list out these private businessmen among the directors of its Central Board (https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2453):
What is the background of these members?
Dr.Nachiket M. Mor
The RBI website describes Dr Nachiket M. Mor as follows:
“He worked with ICICI from 1987 to 2007 and was a member of its Board of Directors from 2001 to 2007. From 2007 to 2011, he served as the founding President of ICICI Foundation and during this period was also the Chair of the Governing Council of IFMR Trust and Board Chair of FINO. He is now the Board Chair of CARE India and, … In the past he has also served as a Board Member of Wipro for five years and Board Chair of the Fixed Income Money Market and Derivatives Association of India for two years.”
An internet search for Dr.Nachiket M Mor shows that he is currently the India Country Director for Bill and Melinda Gates Foundation – a fact also stated on the website of the Bill and Melinda Gates Foundation.
His private sector connection or accomplishment is described on the RBI website as:
“Shri Natarajan Chandrasekaran has been serving as the CEO and MD of Tata Consultancy Services (TCS). .. Shri Chandrasekaran has over 28 years of experience in global software industry and business operations. He served as the Chairman of NASSCOM, and was the Chairperson of the IT Industry at the World Economic Forum, Davos for 2015-16. He is a member of Indo – US CEO Forum as well as India’s bilateral business taskforces for Australia, UK and Japan. ..”
Natarajan Chandrasekaran is currently, the CEO and managing director of Tata Consultancy Services, the leading software service company in the private sector and the website of TCS also says so.
Bharat Narotam Doshi:
RBI website describes Doshi as:
“Shri Doshi is a former Executive Director and Group CFO of Mahindra & Mahindra Limited. He was also the Chairman of Mahindra & Mahindra Financial Services Limited since April 2008…
He is the Chairman of Mahindra Intertrade Limited.
He is also an Independent Director of Godrej Consumer Products Limited.
Shri Doshi is also on the Governing Board of The Mahindra United World College of India, K.C. Mahindra Education Trust and Mahindra Foundation….
Over the last 35 years, Shri Doshi has been actively involved with the work of chambers of commerce and industry being a member of various expert committees. He served as the President of Bombay Chamber of Commerce and Industry for the year 2009-10.”
Did these private businessmen know that Prime Minister Modi would make the fateful decision on the evening of November 8 that would affect the lives millions of Indians and also the entire economy of the country?
The rules of RBI specifies that a month’s notice must be given to each of the directors of the Central Board to transact any specific business and even when an emergency meeting is to be called at a short notice, each of the director present in India is bound to be informed of the meeting and its agenda. Other provisions of this Regulation would ensure that the four private businessmen in the Central Board are kept in the loop about the urgent business of the Central Board.
There is still no concrete evidence to suggest that either these private businessmen or other members of the RBI board broke their oath of secrecy. But it is still valid to ask: was then the Prime Minister’s decision really secret? At least some private members of the Central Board of RBI knew what the PM was going to announce to the nation?