Letters: Lessons in hindsight

Letters: Lessons in hindsight: More low-denomination notes should have been stocked in semi-urban and rural areas...

Business Standard, January 5, 2017

Letters

Lessons in hindsight

With reference to Anup Roy’s report, “Supply 40% notes to villages: RBI to banks” (January 4), although this is not the time for a blame game, the Reserve Bank of India’s latest instructions may be interpreted as tacit admission of the fact that the government and the banking system, including the central bank, missed taking a few steps while demonetising Rs 500 and Rs 1,000 notes November 8 onwards.

These steps include readying at least a majority of ATMs to dispense the new high-denomination notes of different design and size, the print order for which had been given long back. 

Also, more low-denomination notes should have been stocked in semi-urban and rural areas where people were likely to use cash more than electronic payment systems for their transactions. 

In hindsight, these two steps could have been taken without affecting the “secrecy” surrounding the announcement of demonetisation. 

Until recently, the banking system had not made its presence felt in India beyond a “walkable” distance. Those who are responsible for this state of affairs are now in the Opposition. Also, the imported concept of banking correspondents is yet to take root in India. 

A word of caution about new gadgets and systems for money transfer: Even at the cost of delay, new instruments and systems should be tested for universal acceptability and compatibility with the technology and gadgets in use. Changes in instruments and procedures may hamper public trust; there is also the cost aspect.

One possible reason for the present chaos is piecemeal outsourcing of work by institutions to agencies that bear no moral allegiance to their hirers. New strategies have to be drawn up to build reliable relationships between owners and employees in the current era of hiring and firing at higher levels and contract or bonded labour at lower levels.

M G Warrier   Mumbai

W2498/05012017

Comments

Tenkasi Nallasivan said…
It is indeed unfortunate that the Government and the RBI at the behest of the Government
never felt the need to issue comprehensive direction after needed foresight, envisaging the real ground level problem of a decision. It is akin to a physician instead of assessing the
real cause of ailment and treating it, prescribing symptoms based treatment, addressing individual symptoms.
January 4, 2017 at 6:11 PM
Unknown said…
Moot fact is that this major policy has been taken without adequate preparations at all stages. Huge implications were not anticipated, required changes were not foreseen planned (note printing, ATM, payment system, card swipe machines and bank branches counters). Entire exercise looked like sudden and ad hoc tackled on war footing scale. Sending Jt. Secretary to RBI Central Office is not going to help at all. Rather It may demoralise hard working sincere and honest to the core RBI Officials.
January 4, 2017 at 8:11 PM
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