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Andy Mukherjee

By a 99.3% Verdict, India’s Cash Ban Was a Farce

The exercise was supposed to freeze out black money, but virtually all flooded back.

The chaotic days of 2016.

The chaotic days of 2016.

Photographer: Anindito Mukherjee/Bloomberg

In the chaotic final months of 2016, angry citizens were slamming the Reserve Bank of India by calling it the “Reverse Bank.” It’s taken Governor Urjit Patel, who had only recently stepped into the top job, almost two years to reassert his authority and reestablish the institution’s credibility with a couple of notable successes just this week.

Ridicule flew thick and fast after Narendra Modi’s November 2016 demonetization, for which Patel was a reluctant point man. The decision to outlaw 86 percent of the country’s cash was political, but the responsibility for taking back the suddenly worthless notes and issuing a rationed trickle of new ones to snaking, impatient queues at teller counters and ATMs fell to the central bank. The RBI issued guidelines; scrapped them; made new ones, only to roll them back again. The opposition Congress Party accused it of changing the rules around withdrawals and deposits 126 times in 43 days. Hence the unflattering moniker: the Reverse Bank of India.