State demands bank status for state treasury, cooperatives

New Delhi: As banks struggle to swap banned currency notes, Kerala Monday demanded bank status for the state treasury and primary cooperatives and said the sudden demonetisation move causing hardship to public could have been avoided by giving advance notice.

Chief Minister Pinarayi Vijayan and his Finance Minister TM Thomas Issac met Union Finance Minister Arun Jaitley to highlight the hardship caused by the November 8 decision to withdraw old Rs 500 and Rs 1,000 notes.

"We have demanded that state's treasury should be given the status of banks. As also, for Kerala, the 3,000 primary cooperatives (be given bank status)," Issac said after the meeting.

Such a status, he said, has already been given to district banks. "Without similar status to primary cooperatives, the situation in Kerala cannot be resolved," he added.

Stating that demonetistaion will help get rid of fake notes and control black money, he said black money kept in cash is only about 20 per cent or so of the whole illicit wealth in the country.

"But our position has been, this could have been done without creating so much trouble for the people and the economy," he said.

He said if an advance warning that at some particular date in future the demonetisation will take place, could have reaped the same impact to curb black money with some few more arrangements.

"That would have been much better." Elaborating on measures that can control blackmoney, he said know-your-customer or KYC norms should be strengthened and land registration norms tightened.

He said after giving timelines for these, it would have helped reap similar benefits.