new delhi the governments proposal to ban rs 500 and 1000 notes was placed by the then rbi deputy governor rama subramaniam gandhi before its board which resolved to back the move in larger public interest though some directors raised concerns about shortterm negative impact on gdp and hardships to some sections official sources said on tuesdaythe proposal presented by r gandhi to the reserve bank of india board on november 8 2016 said the move was necessitated due to a finance ministry letter received a day earlier advising the central bank that cash was facilitating black moneythe clarification follows reports citing an rti reply saying that rbi board had not agreed with the governments reasoning on the need for demonetisationthe sources claimed that the resolution of the central bank was forwarded to the government on november 8 2016 itselfciting minutes of the meeting they said some of the directors had observed that though demonetisation is a commendable measure it will have shortterm negative effect on the gdp for the current yearmembers did make some observations which were recorded in the minutes but these did not represent the views of the rbi these observations also did not persuade any member come in the way of endorsing the proposal fully a functionary saidone of the observations made was that arriving domestic long distance travellers who would be carrying high denomination currency will be taken by surprise it would also have an adverse effect on touristssome directors felt that black money is held not in the form of cash but as gold or real estate hence the move would not have a material impact on those assetsreferring to the minutes of the meeting the sources underlined that the rbi board concluded that in larger public interest the balance of advantage would lie in demonetising rs 500 and rs 1000 currency notes