New Delhi: Cash flow, restricted post-demonetisation, will normalise soon but might take longer in rural and remote areas, Reserve Bank of India (RBI) Governor Urjit Patel informed a parliamentary panel yesterday.
Patel told the Public Accounts Committee (PAC) of Parliament that the situation of cash flow in the country was "almost normal" in urban areas, informed sources said.
When panel members expressed concern over online transactions charges, Patel told them that RBI was trying to come out with a new mechanism to bring down online transaction costs, and was in talks with all stakeholders, including banks and service providers, the sources said. He further asserted that demonetisation would be beneficial for the economy in the medium- and long-term.
He added that efforts were on to improve cash flow to rural and remote areas in the country. "It will take a few more weeks for the situation to improve in rural and remote areas," the sources quoted him as saying. Prime Minister Narendra Modi had on November 8 last year announced demonetisation of ` 500 and ` 1,000 currency notes, saying the move was aimed against black money, counterfeit currency and terror financing.
Asked by the members about multi-fold increase in deposits in cooperative banks following demonetisation, Patel is learnt to have said the matter was being probed by Financial Intelligence Unit-India (FIU-IND). Earlier this week, the RBI Governor had told the Parliamentary Standing Committee on Finance that new currency notes, worth `9.2 lakh crore, were introduced into the financial system post-demonetisation. The issue of demonetisation was mentioned by PAC Chairman K.V. Thomas in his initial remarks but a BJP member objected to it, saying the agenda of the meeting was "review of monetary policy". The member said the demonetisaion of legal tender comes under the RBI Act, while Monetary Policy falls under the purview of the Finance Act.
