Demonetisation Will Transform Indian Economy, Says RBI Governor Urjit Patel

On the eve of the deadline for citizens to deposit demonetised currency in banks, Reserve Bank of India (RBI) Governor Urjit Patel said that demonetisation will have a transformative effect on the economy going forward, despite some short-term disruptions and "public hardship".

"The withdrawal of specified bank notes will impart far-reaching changes going forward. It is expected to significantly transform the domestic economy," Patel said on Thursday in his foreword to the half-yearly Financial Stability Report.

He said the increasing adoption of digital modes of payments will lead to greater intermediation, efficiency gains, accountability and transparency. Patel acknowledged that demonetisation of high-value currency has caused short-term disruption and hardship.

On the domestic macroeconomic front, condition remains "stable" with a cool-down in inflation, the RBI Governor said, adding that the growth momentum has "slackened" recently.

With inputs from IANS