Due to the demonetisation policies by the government of India and the Reserve Bank of India, the most affected is the people of Kerala because much of the unaccounted money (unaccounted by RBI) resides in the cooperative banks of Kerala (Almost 1500 banks in Kerala). Kerala Chief Minister himself said that there are 1.27 Lakh Crore worth of deposits are there in the Cooperative banks of Kerala when he was inaugurating the protest in front of RBI on 19th Nov 2016.
Though government of Kerala is moving to Supreme Court against the RBI decision not to allow cooperative banks to exchange the old currency for new currency, it will not be easy to get a verdict in favour. Why?
Before looking into that lets look at the reasons.
1. How this much deposits accumulate in rural areas when the common people of there are under debt?
There is a high level of indebtedness in rural areas in cooperative banks but these banks have huge deposits. From this, its evident that the money is not of the poor people but of the rich.
2. No PAN is needed at these banks
No PAN card is required to deposit money in these banks. Also no TDS is deducted and there is no tax on the interests earned at these banks. As a result there is no reporting to Income Tax department. This is why some people call these banks Swiss Bank of India. In 2008 there was a move to bring these banks also under the purview of Income Tax Department, but they went to Supreme Court. A few references below.
3. Political Leaders always against making the accounts transparent
Political parties are always hesitant to make the accounts transparent. Even now, they are not ready to allow income tax departments to look in to the accounts. Even in 2008 CPIM General secretary opposed it. (http://zeenews.india.com/home/cpm-opposes-move-to-impose-income-tax-on-cooperative-banks_419577.html).
This all adds doubt in the minds of common man.
Now, why it is not easy?
- Cooperative banks are not public, they are individual.
In 2013, Supreme Court approved that Cooperative banks registered as Cooperative Societies in Kerala are not public bodies and can be considered independent bodies. Now RBI has directed the limits for individuals and these banks also will come under the definition of individual. So they also can exchange 2000 Rs per day !!!
The Supreme Court has held that cooperative banks registered under the Kerala Cooperative Societies Act will not fall within the definition of Public Authority as defined under Section 2(h) of the Right to Information (RTI) Act. Senior Counsel K Padmanabhan Nair, appearing for the societies, submitted that, “The societies are autonomous bodies and merely because the officers functioning under the Societies Act have got supervisory control over the societies will not make the societies public authorities within the meaning of Section 2(h) of the RTI Act.” He further stated that societies are not statutory bodies and are not performing any public functions and will not come within the expression “state” within the meaning under Article 12 of the Constitution of India.
Read more at: http://www.livelaw.in/cooperative-banks-will-not-come-under-the-purview-of-rti-supreme-court/
2. RBI may allow Cooperative banks if they become transparent, can they?
RBI may allow these banks to exchange money and withdrawals as other banks, but they may have to declare the details of the deposits.
Is it easy? Not at all.
Declaring the details will make it difficult for the depositors to reveal the source of the deposits. It is said that an approximate 2,500 crore rupees have been deposited in the bank on the 8th Nov 2016 after the PM’s declaration, and most of them has been posted on previous date as many of these banks are not computerised.
If Kerala government is supporting the common people, let them declare the details of the deposits and make the life of the common people easy.
Indian Politics 