None of the measures that PM Modi had promised with the ban on high currency notes, put into effect in November last year, had been realised, Congress senior spokesperson Anand Sharma said.
"Demonetisation is the biggest scam, as the government has helped the wrong people legitimise their illegitimate money through it and has betrayed the poor people of the country with false promises," he said.
He stressed it was the prime minister's "direct responsibility as it was his personal decision".
"The Prime Minister should take moral responsibility by accepting his mistake and apologise," he told reporters in Delhi.
Mr Sharma alleged demonetisation had led to a GDP loss of Rs 2.25 lakh crore.
The Prime Minister had committed a breach of trust with the people by making false claims on the issue, he added.
Mr Sharma said PM Modi had promised to unearth black money and end corruption, terror funding and counterfeit currency.
None of the promises made by him while announcing the decision had come true, he said.
"Once the honour of the prime minister's word is gone and the trust of the people destroyed, then where is his credibility and where does he stand," he asked.
The Congress's attack came after the Reserve Bank of India said in its annual report yesterday that banks had received Rs 15.28 lakh crore or 99 per cent of the invalidated currency.
The senior Congress leader wondered what the note ban decision had achieved as 99 per cent of the money had been returned, and accused the prime minister of "changing the narrative" on the issue repeatedly.
"The Prime Minister made a sensational announcement on November 8 that unleashed financial anarchy and economic chaos in the country. The Reserve Bank figures yesterday exposed the falsehood propagated by the government," he said.
Mr Sharma said dozens of people died and committed suicide. "Who is responsible for it," he asked.
The former Union minister also accused the government of being "insensitive" as the decision brought "misery to people who kept waiting in long queues to get their own money from the banks".
Training his guns on PM Modi, Mr Sharma said he kept "changing his narrative and kept pace with a species called the chameleon, which keeps changing its colours".
He added that PM Modi's ministers, too, had a "direct responsibility".
Mr Sharma accused PM Modi of defaming his own people before the world. Had this happened in any other country, the PM would not be in office, he added.
He asked the Prime Minister to explain his Independence Day speech where he mentioned that Rs 3 lakh crore of black money had been unearthed and challenged him to make public the list of companies and individuals whose undeclared money it was.