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  1. The best way that a central bank can support growth on a durable basis is to ensure inflation is low, stable — there is financial stability — and that is the role that the central bank plays.
  2. People have asked why the new currency introduced was different in size and thickness from the old. This is because the new currency has been designed to make it hard to counterfeit. When you are going to make a change of this magnitude, you need to get the best standards in place.
  3. There is little room for complacency, and it is important to guard against sporadic volatility in financial markets.
  4. People were holding high denomination notes to keep tax unaccounted for money. Some sectors like real estate were using cash to avoid tax.
  5. The two important variables for the policy formulation are projected inflation and the output gap. There is no clear hidebound mathematics that we must give ‘X’ weight to inflation and ‘Y’ weight to growth and form the associated policy.
  6. Growth is always there in the MPC’s scheme of things; we don’t lose sight of that, but not at the cost of inflation.
  7. From the RBI side, the fake Indian currency note is an important issue that needed to be addressed. The other collateral benefits from this, in terms of greater accountability, better public finance, more transparency, are, by definition, areas that take time to fully play out.
  8. Remonetisation has happened at a fast pace, and that was part of the plan that, subsequent to the withdrawal of the specified bank notes, our production plans and supply processes would ensure that the remonetisation happened as quickly as possible.
  9. The materialisation of reforms in the form of rollout of the GST, the institution of Indian Insolvency and Bankruptcy Code, and the abolition of the Foreign Investment Promotion Board should boost investor and investment confidence.
  10. There will always be divergence of views on the output gap, as it is unobservable in a rigorous direct sense. There are only estimates. How can there be a strong consensus on that?
  11. The monetary policy committee could either keep rates constant, increase them, or bring them down. There are three options possible compared to when it is accommodative.
  12. Divestment measures would improve overall banking sector health.
  13. I think that it is important that one grows a thick skin fast in this business, and I think we have done that.
  14. This is a once in a lifetime event. It is very rare to remove 86% of the currency in circulation in one go. The logistics of such an operation are mammoth.
  15. Very few countries grow at high rate if inflation is high and volatile. I think, in a way, we are doing our bit to support a higher growth rate, but on a durable basis.
  16. It is important to recognise near- and medium-term risks to the inflation outlook.
  17. Enhanced transparency has helped to reinforce the stability of India’s financial system.
  18. I think India’s policy that the openness of trade should be carried through a multilateral process is the right one.
  19. One of the things that the public sector banks need to do is to raise private capital from the market and not rely on government largesse.
  20. There are tens of thousands of bank branches and 4,000 currency chests. We need to be careful and try that this is a number which is not a mere estimate but a verified number both physically and in the accounting sense.

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