1. Rs 500, Rs 1000 ban crisis: Kerela wants bank status for state treasury, cooperatives

Rs 500, Rs 1000 ban crisis: Kerela wants bank status for state treasury, cooperatives

Citing hardship to the public due to the sudden demonetisation of R500 and R1,000 notes, Kerala on Monday demanded bank status for the state treasury and primary cooperatives.

By: | New Delhi | Published: November 15, 2016 6:29 AM
Kerala chief minister Pinarayi Vijayan, who has criticised the Narendra Modi government’s decision because of the difficulties being faced by the public (PTI) Kerala chief minister Pinarayi Vijayan, who has criticised the Narendra Modi government’s decision because of the difficulties being faced by the public (PTI)

Citing hardship to the public due to the sudden demonetisation of Rs 500 and Rs 1,000 notes, Kerala on Monday demanded bank status for the state treasury and primary cooperatives.

Kerala chief minister Pinarayi Vijayan, who has criticised the Narendra Modi government’s decision because of the difficulties being faced by the public, and state finance minister Thomas Isaac met Union finance minister Arun Jaitley in this regard on Monday.

“We have demanded that the state’s treasury and the 3,000 primary cooperatives be given the status of banks,” Isaac said after the meeting. He justified the demand by pointing out that the Centre has already given the same status to district central cooperatives. “Without similar status to primary cooperatives, the situation in Kerala cannot be resolved,” he added.

The meeting with Jaitley assumes importance against the backdrop of Vijayan’s accusation that some people close to the Centre had received prior information about the demonetisation move. BJP’s Kerala unit had returned the fire by alleging that black money was deposited in the state’s cooperative sector which is controlled by the ruling CPI(M).

Issac pointed out, while demonetisation would help get rid of fake notes and control black money, the black money kept in cash was only about 20% or so of the whole illicit wealth in the country. “This could have been done without creating so much trouble for the people and the economy,” he said.

A warning in advance, that demonetisation would take place in near future, could have reaped the same impact with a few more arrangements in place, Isaac said.

Elaborating on measures that could control black money, Issac said the know-your-customer or KYC norms should be strengthened and land registration norms tightened.

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