Heavy rush to exchange notes

Thiruvananthapuram: Banks in Kerala witnessed heavy rush of people to change 500 and 1000 rupee notes, which ceased to be legal tender, on Thursday.

Long queues were seen at Reserve Bank of India and major banks and post offices.  Issue of new notes from Post offices were delayed at several places as currency had not reached them. As of now, a person could exchange only Rs. 4000 a day. From tomorrow, the ATMs would be reopened. However, only Rs. 2000 could be withdrawn in a day.

Following request from the State government, the Centre allowed cooperative banks also to accept demonetised notes as deposits. However, they are not allowed to exchange notes. Some cooperatives have received lakhs of rupees as deposits in a single day.

Deposits in cooperative have come into focus with the Income Tax Department looking into deposits in them and the State government objecting to that. It is believed the political leaders, contractors and officials have parked illegal money in the cooperative, especially in cooperatives that offer lockers. BJP leader K. Surendran alleged that the CPI (M) and SDPI had large deposits with the cooperatives and wrote to Reserve Bank Governor seeking an enquiry.

Chief Minister Pinarai Vijayan and Finance Minister T. M. Thomas Isaac have written to the Centre urging it issue directives to help treasury operations which had been affected by demonetisation.

The Finance Minister said on Wednesday that much of the black money was parked abroad or in gold and land in India.

He said that gold merchants would be required to upload bills to government servers to check tax evasion and purchases using black money. Asked about the low fair values for land aiding creation of black money, Dr. Isaac said that it was the situation all over India.

In his Budget for the current year, the Minister had announced increase in rate of stamp duty to fetch more revenue from land transactions instead of revising fair values.