The government recommended demonetisation on November 7 and we approved it the next day, the Reserve Bank of India has said. This disclosure was made by the RBI to a parliamentary standing committee on Tuesday.
The RBI says that the decision on demonetisation could not have come at a more opportune time. The RBI was advised to demonetise the Rs 500 and 1,000 notes on November 7. The RBI board reviewed the proposal and implemented it after the Prime Minister made the announcement a day later, the RBI also said.
The RBI further said that it was in agreement with the government that introducing new notes would facilitate a crackdown on black money and terror-funding. It was in May last year that the government had advised to introduce the Rs 2,000 notes.
It was also stated 86 percent of the notes were withdrawn. While there are not enough notes to meet the demand there is enough currency to counter the impact of the note ban, the RBI also said.