A day hasn't passed without confusion ever since the nation has slipped into demonetisation mode. Sometimes it's RBI, and on other occasions, it's the Government that issues directives only to reverse the previous instructions. The count of such flip-flops has already surpassed 100 Between November 8, 2016 and December 21, 2016.

The Government has often defended its moves saying that operation of such magnitude and scope couldn’t have been planned to a minute detail on the day one.

While there is nothing wrong with being responsive to the changing circumstances what bothers citizens is the ‘trial and error’ approach of the Government.

While there is no intent to suggest that the functioning of RBI has changed under the new governor, we can’t ignore some facts.  The recent policy approaches of the RBI haven’t been befitting its image and reputation.

What’s new?

The Government, at various levels, had already made it clear that a person can deposit money in his/her account anytime until December 30, 2016. The least citizens of this country could have expected is that the Government would remain consistent on this policy at least.

But, it seems even that was too much to expect from this Government and the central bank.

More directives, more confusion…

On December 19, 2016, the RBI issued a press release restricting people from depositing old Scrapped Bank Notes (SBNs) in their bank accounts more than once had the amount been over Rs 5,000. Moreover, one time or cumulative deposits of over Rs 5,000 were made subject to an explanation in writing from the depositor for the delay.

This was the 59th circular from RBI since demonetisation, which came as a bolt from the blue—especially to those who waited for the last few days to deposit SBNs, and those who couldn’t deposit for genuine reasons.

The move was justified as being acted upon to curb the malpractices some people were following to launder money. But what it overlooked was, even the genuine depositor could have suffered big time. 

Soon after the RBI’s press release, the Finance Minister called a press conference to clarify that only repeated attempts to deposit old notes would require the depositor to provide an explanation. He also stated that deposits of any amount, even if over Rs 5000, won’t be subject to the declaration if made in one go. Despite that, banks were asking even one-time depositors to fill in declaration forms, and rightly so; because unless they receive any such communication in writing from their regulator i.e. RBI, they couldn’t go by what India’s finance minister says on the news channel.

RBI revised its policy once again…

Finally, the RBI has come out with a revised circular highlighting that, now the KYC complaint account holders can deposit as much amount as they want before December 30, 2016, without being asked any question.

Although this has been a relief for those who have linked their PAN cards or Aadhaar Cards to their bank accounts, those who haven’t complied with KYC requirements would still owe an explanation to the bank officials if they were to deposit more than Rs 5,000 one-time or on a cumulative basis.

If you’re depositing less than Rs 5,000 in your account one-time, it doesn’t matter if the bank account is KYC-compliant or not.

This everyday confusion shakes peoples’ trust in authorities. Instead of speaking through media, why RBI and the Government can’t discuss things internally before releasing any press release? Still, we need to go by RBI Governor's statement that RBI knew about the demonetisation and was planning for it for last several months. Really?

The international media watches such events minutely. The policy flip-flops have made the move of demonetisation nothing but a joke.

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