"This was an impulsive decision which hurt the country to no ends," Mr Chavan was quoted as saying by news agency PTI.
He said that as time passed, a different scenario came up, contradicting the initial claims by the prime minister last year to get the black money back.
"After the RBI said that all the money had come back into the system, Jaitleyji (Finance Minister Arun Jaitley) had said the intention behind demonetisation was digitisation. Now the question that arises is, was the prime minister aware of the real intention or was he kept in the dark," Mr Chavan said.
The Congress leader also asked for a payments regulatory board as he claimed that the payment processing companies would otherwise keep looting the country.
"Jaitleyji had announced to form the board in his budget speech. Yet, nothing has been done. Unless there is a proper infrastructure in place, people cannot be forced to go cashless," Mr Chavan said.
After a year of note ban, the government is facing scathing attack by the Opposition parties, while the Congress Vice President Rahul Gandhi called demonetization 'a tragedy', West Bengal Chief Minister Mamata Banerjee called it a 'Big Scam' and P Chidambaram alleged that the 'eliminated' black money would be used for upcoming Gujarat assembly elections. While the government is celebrating this day as 'anti-black money day', Opposition parties are protesting and calling it a 'Black Day' in the history of India.
A year ago on this day, Prime Minister Narendra Modi had made a sudden announcement to roll back Rs 500 and Rs 1,000 notes. The move caused great inconvenience to the people who had to stand in long queues outside banks and ATMs to deposit and withdraw their own money.
(With Inputs From PTI)