New York Times article demonetized currency notes and banknotes will be allowed to remain in circulation in India as long as they are declared to be currency notes by the central bank.
The RBI has decided to take this decision in response to a Supreme Court order that sought to limit the circulation of currency notes in the country.
But for the government, demonetizing the notes was the wrong decision.
It is unclear if the government will appeal against the decision, as the Supreme Court’s order was a procedural matter, and it was not binding on the central government.
The government could decide to issue a separate notification, which would then trigger an immediate ban.
“It is a procedural decision and it will be enforced by the government,” said Sudhir Garg, a professor of finance at the Indian Institute of Management, Mumbai.
“If the central authority decides to implement the ban, it will have to be implemented by the ministry of finance.”
India’s RBI had issued an order on September 4 that would have required people to declare currency notes with a face value of Rs 2,000 to Rs 5,000.
The central bank has said it is doing so to stop money from being moved abroad.
“We are only concerned with people’s intent and what they intend to do with their notes,” said Amit Kumar, the RBI’s chief economic adviser.
“The Reserve Bank of India will not allow the circulation or sale of demonetised notes in India,” said Manish Agrawal, deputy director general of the Indian Statistical Institute.
The central bank had also said that it was working to implement its order on demonetising currency notes.
The RBI’s decision comes in the wake of a slew of demonettized notes being found on online platforms.
Some of the most popular sites include Flipkart, Flipkinton, eBay, and Paytm.
In a tweet on Friday, India’s commerce minister Manish Tewari said the government has asked the Reserve Bank to allow the import of notes from the Indian market.
“The RBI has instructed the Reserve bank to allow import of Rs 2000 notes.
If the RBI is not allowed to allow this import, it can be banned,” he tweeted.
“This will ensure maximum safety for consumers.”
The government has also asked the government of India to issue an interim order to restrict the circulation and sale of cash, and to issue another interim order, which will allow the issuance of cash notes for two months, if the RBI does not provide the information.