Co-operative banks allowed to deposit old notes, says Attorney General to SC

New Delhi: The government will allow district central co-operative banks to deposit demonetised notes received from their customers with the Reserve Bank of India, Attorney General Mukul Rohatgi submitted before the Supreme Court on Thursday.

The government had demonetised 500 and 1,000-rupee notes from Nov 9, asking all people with such notes to deposit it in their accounts with limited exchange facility. However, on Nov 14, the RBI notified that the district central co-operative banks won’t be allowed to take deposits of or exchange invalid notes.

Some co-operative banks had moved the court against not being allowed to take deposit of invalid notes. The case was bunched up with other pleas on demonetisation.

Rohatgi said a notification allowing the district central co-operative banks to deposit notes with RBI will seen be released.

A bench headed by Chief Justice T.S. Thakur asked the AG if there is a formula that the central bank is following as to how much new currency is immediately handed over to a bank when it comes with a chest of old notes.

The attorney general did not seem to have that answer on his finger tips and instead replied that there is right now 5-trln-rupee worth of new 500- and 2,000- rupee notes in addition to 2.5-trln-rupee worth old and new 100- and other denomination currency circulating in the market.

At this point, Chief Justice Thakur wondered if 7.5-trln-rupee worth of cash is in the system why are people having difficulty in withdrawing their 24,000 rupee per week from the banks, as has been allowed by the government.

Rohatgi assured the apex court that things will “normalise” after

14 days. Without giving a specific date, the court said it will hear the cases next when the court open in January after the winter break.

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