BB makes public take back seat in demonetisation crisis

Bangladesh Bank’s (BB) spokesperson Subhankar Saha earlier on the record said the BB won’t be able to provide any kind of assistance to those who have Rs500 and Rs1000 notes in their possession. Since Rs500 and Rs1000 notes had lost all value, many were frustrated for Bangladesh Bank’s lame duck policy. But when the customs and scheduled bank authorities asked BB the same, the central bank authorities appeared not-so-lame. BB Governor Fazle Kabir has recently requested his Indian counterpart to take “necessary measures” to exchange all Rs500 and Rs1000 notes in Bangladesh state exchequer’s possession. In a letter addressed to Reserve Bank of India (RBI) Governor Urjit Patel, Kabir also urged concerned Indian authorities to take into account bank notes, both in the Bangladesh banking system and seized by customs and law enforcement authorities. Abu Hena Mohammad Razi Hasan, deputy governor of Bangladesh Bank, said: “The success of this endeavour depends on the willingness of the Indian government.” The Bangla Tribune reported that four state-owned banks have Rs1.2m in their possession, of which Rs1.1m is in Rs500 and Rs1000 notes. These banks recently transferred the notes to the Kolkata branch of Sonali Bank, as per a central bank move to exchange those notes. But Indian authorities are yet to take any measures from their end, sources told the Bangla Tribune. In a surprise move in November, Indian PM Narendra Modi demonetised 86% of the country’s cash in circulation in a radical bid to take down the rampant black money. The bold financial reform has left many Indians in a quandary as their cash in hand has been rendered defunct. Long lines initially formed to swap the old notes for new, but a crisis of new notes have infuriated many Indians. ATMs and banks have been attacked by enraged mobs recently. The decision has also affected foreigners in India, who are facing great difficulty in exchanging their notes as well. The trouble also extends to foreign reserves, which the Indian government has not announced how it plans to deal with.