Taking forward the opposition to the centre’s demonetisation moves, the Kerala Assembly passed a resolution on Tuesday demanding that the decision to prohibit co-operative banks from exchanging Rs 500 and Rs 1000 notes be recalled.
The move received unanimous support, including from MLAs of the opposition UDF, with only the lone BJP MLA O Rajagopal opposing the move.
“It is true that the co-operative sector flourished under popular support. But unfortunately, the co-operative institutions have become unable to fulfil its goals,” Rajagopal said.
Rajagopal's attempt to move an amendment to the motion was shot down by State Water Resources Minister Mathew T Thomas quoting rules and procedures that were upheld by Speaker P Sreeramakrishnan.
In the special assembly session, CM Pinarayi Vijayan told MLAs that the Centre’s decision would hurt the farmers most and the whole rural economy was dependent on these banks. He gave the assurance that none of the money deposited in district co-operative banks will be lost.
“No measures have been taken against black money hoarders by the BJP. The hoarders faced no issues with the demonetisation move. Those who admit that currencies of higher denominations could be hoarded, are bringing the Rs 2000, Rs 1000 and Rs 500 back again. The move had only destroyed the financial position of the state and brought sufferings to the common man,” Pinarayi said.
The CM added that demonetisation had taken the whole country into economic slavery, and invoked the Supreme Court’s observation that the current crisis may lead to riots.
He also accused the centre of hiding the details of black money hoarders and letting Vijay Mallya go scot-free.
"This is nothing but financial fascism unleashed by Modi and the way it was done clearly shows that this was a foolish decision," Leader of Opposition Ramesh Chennithala said.
Former Chief Minister Oommen Chandy said the biggest beneficiary of the past two weeks was the e-wallet, Paytm, that had spent Rs 50 crore in their advertisement applauding Modi. Paytm's business has doubled, he said.
Soon after the demonetisation decision was announced, the RBI had issued a directive banning co-operative banks from exchanging discontinued currency over allegations of money laundering in these banks
The cooperative banking sector in Kerala is a three-tier system, with about 1,600 primary cooperative banks attached to 14 district banks, which are further linked to the apex Kerala State Cooperative Bank (KSCB).
The total deposits in these cooperative banks, according to Kerala Cooperation Minister AC Moideen is around Rs 1.27 lakh crore.