Monday, May 20, 2024

Ex-Deputy RBI Governor: Only Centre Holds Authority to Withdraw Legal Tender

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A former Deputy Governor of the Reserve Bank of India (RBI) has asserted that the authority to withdraw legal tender lies solely with the central government. In light of recent discussions surrounding the withdrawal of specific currency notes, the statement emphasizes the constitutional role of the Centre in making decisions related to legal tender.

According to the ex-Deputy RBI governor, the power to withdraw legal tender is vested in the central government, as specified under the Reserve Bank of India Act and other relevant legislation. This authority enables the government to determine which currency notes will be deemed as legal tender and when they may be withdrawn from circulation.

The statement clarifies that while the RBI plays a crucial role in currency management and implementation of monetary policies, the ultimate decision-making power rests with the central government. The government’s authority includes the ability to introduce new currency notes, demonetize existing ones, or implement any other measures related to legal tender.

This clarification is significant amidst debates surrounding the withdrawal of specific currency denominations and the concerns raised by opposition parties and various stakeholders. It underscores the constitutional framework in which currency-related decisions are made, providing legal clarity and authority to the central government in such matters.

The ex-Deputy RBI governor’s statement reinforces the notion that decisions related to currency withdrawal or demonetization require careful consideration and coordination between the central government and the central bank. It highlights the importance of aligning fiscal and monetary policies to achieve desired economic outcomes effectively.

As discussions and debates on currency matters continue, this statement serves as a reminder of the constitutional roles and responsibilities of different institutions involved in the management of legal tender.

In conclusion, the ex-Deputy Governor of the RBI has clarified that the authority to withdraw legal tender rests with the central government. This statement underscores the constitutional framework and reinforces the central government’s decision-making power in currency-related matters. It provides important context amidst ongoing discussions and debates on currency withdrawal and demonetization.

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