6 months of planning for rupee revolution

MUMBAI • Months of planning by a select few sworn to secrecy and then cash-laden trucks on the streets. But this was no bank robbery; it was an audacious plan to issue new notes across India.

Only a handful of India's 1.25 billion population knew that on Tuesday night Prime Minister Narendra Modi would announce the withdrawal of 500- and 1,000-rupee notes from circulation.

The assault on "black money", which stunned the country and saw large queues form outside ATMs and banks, was carefully planned over six months.

Only Finance Minister Arun Jaitley, the Reserve Bank of India (RBI) governor and a few close officials were in the know until the very last minute, according to Indian newspaper reports.

"If secrecy had failed, people would have invested most of their cash in Hawala rackets, gold or real estate before the announcement, worsening the black money issue," said Mr Paras Savla of Mumbai-based investment management firm KPB & Associates.

The Times of India said many of Mr Modi's ministers were briefed on the plan at a Cabinet meeting only just before he addressed the nation. They were then not allowed to leave until he had finished his speech.

Meanwhile, more than 1,000km away in Mumbai, the RBI was briefing bank heads. They had been called to the RBI in the morning to receive a locked currency chest which they were told contained notes of the new 2,000-rupee denomination.

They were instructed not to open the chest or speak about it until later that night, according to the Mint newspaper. It was when they opened it, as Mr Modi was speaking, that they learnt about the new 500-rupee note, the paper added.


A version of this article appeared in the print edition of The Straits Times on November 11, 2016, with the headline '6 months of planning for rupee revolution'. Subscribe