Supreme Court to pass order on demonetisation soon

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The Supreme Court on Thursday concluded its hearing on several petitions challenging demonetisation of Rs 500 and Rs 1,000 notes last month after prolonged hearing of the parties. Chief Justice T S Thakur, who presided over the bench, said at the end: “We will examine all issues”. No date was given.

The petitioners had demanded an interim order to ease the pain of the public, who had to stand in long queues. Senior counsel Kapil Sibal, representing some of the petitioners, argued that it was the right of the depositors to get their money. 

The government, instead of keeping the promise to withdraw Rs 24,000 a month, has arbitrarily reduced the amount to Rs 2,000. The plight of the cooperative banks was disastrous because of the freeze on receiving and paying their agricultural constituents and members. After three days of the November 8 notification, all transactions were stopped, causing immense agony to the farmers and others.

The Chief Justice asked the government why it could not return part of the money the banks had collected so that the cooperative banks could return to business. He asked whether there was a norm by which a percentage was given back to the banks. He suggested a timeline by which new currency could be provided to them. 

The Attorney-General Mukul Rohtagi replied that it was not possible because of currency shortage. The cooperative banks were taking money without proper KYC (Know Your Customer) procedures and audit.

They were being used to hide black money. Moreover, it is difficult to fix a percentage for returning their deposits because the demand and deposits fluctuate in different seasons. He further alleged that the bank managers committed fraud and the government is going after them through raids on the banks.