“It is said that the government was in consultation with the RBI for six months. The (RBI) board was never in the loop. Maybe one or two people from RBI would have known. Suddenly within half-an-hour or one hour, you issue a notice and call a meeting without even informing about the agenda,” said an official who was part of the decision making, hinting that there was no proper discussion on the issue in the RBI board.

The RBI board had cleared the introduction of Rs 2,000 notes six months before demonetisation in May 2016 but didn’t discuss withdrawal of 500 and 2000 notes in July and August board meetings in 2016.

In its Right to information (RTI) reply to The Indian Express earlier, the RBI said the Central Board discussed and approved the proposal to introduce Rs 2000 notes on May 19, 2016. However, the RBI said that there was no discussion on a possible withdrawal of legal tender of the Rs.500 and Rs.1000 notes at the May board meeting last year. This was also not discussed during the subsequent Central Board meetings on July 7 and August 11, the RBI has said. Raghuram Rajan was the Governor when the proposal to introduce new 2000 rupee notes was approved by the RBI board in May last year.

The demonetisation was announced on November 8, 2016.

On a specific query about whether the RBI Central Board received any proposal to demonetise Rs 500 and Rs 1000 notes from the government, the RBI said in another RTI reply, “the Central Board of Reserve Bank of India in its meeting held on November 8, 2016, recommended the proposal to withdraw legal tender character of 500 and 1000 rupee notes to the Central Government.’’

However, the RBI declined to provide the minutes of the Central Board meeting on November 8, 2016, saying that the “information sought is exempt from disclosures under 8(1)(a) of the RTI Act, 2005.”

The important point is whether all the merits or demerits, pros and cons were gone through in detail, and there is no clarity on this, he said. “Possibly, the court could have commented something for the future that when there is an autonomous body or an expert body which is supposed to look at this aspect, its perspectives should be given significant weightage,” said the source who preferred anonymity.

When asked whether the demonetisation process undermined the RBI’s autonomy, former RBI Deputy Governor R Gandhi said, “I don’t think there is any fundamental question relating to RBI’s autonomy in this matter. Public policy has always been through discussions with various stakeholders, which also includes the government. Just because the RBI is supposed to take independent decisions, doesn’t mean that it should not consult the government at all … that’s not the way to interpret it,”

What has upset some bankers is that the note withdrawal process was done in such a hurry that it hurt the people and bankers. “There was an announcement that a window would be provided so that people can exchange old currencies at the Reserve Bank, but it didn’t happen. This is an area where the Supreme Court could have commented on,” said a person in the know.

Under Section 26 (2) of the RBI Act, “on the recommendation of the Central Board, the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender [save at such office or agency of the bank and to such extent as may be specified in the notification].”