Can't afford another window to deposit banned notes: Centre tells Supreme Court

Henrietta Strickland
July 17, 2017

On July 4, the apex court had sought to prevail on the Centre to open a fresh window for exchanging scrapped Rs 500 and Rs 1,000 notes if people could establish that the money was theirs and they had a genuine reason for not changing it before December 30.

The Central government on Monday refused to give another opportunity to exchange demonetised currency notes of Rs 500 and 1,000 to those who couldn't do it by the deadline of December 30, 2016, saying this would defeat the very objective of eliminating black money. Even some educational institutions were found to have accepted fees in old currency notes after midnight of November 8.

The government told the Supreme Court on Monday that people can not be given another chance to deposit old currency notes that were demonetised in November, warning that a new exchange window suggested by the top court would defeat the objective of the exercise. But an ordinance was brought in that declared possession of old notes illegal, which the government said was done to plug the malpractices and irregularities noticed during the first three weeks after demonetisation.

Justifying its decision not to give any further window, the affidavit said, "The period thus available for everyone to exchange and or deposit the specified bank notes was spread over 51 days (except for closed holidays) unlike the earlier demonetization drive carried out in the year 1978, when it was restricted to six days only". Similarly, the Income Tax department conducted more than 15,000 surveys which resulted in detection of undisclosed income of more than ₹33,000 crore.

The demonetisation of Rs 500 and Rs 1,000 notes in November 2016 had caused a cash crunch in the country as the bills had made up almost 86% of the currency in circulation then. If people were unable to deposit them by that day, they could do so until March 31, 2017, at RBI branches after complying with certain formalities. On being asked by the Parliamentary Standing Committee on Finance to reveal the amount of demonetised currency which was deposited between November 8 to December 30, RBI Governor Urjit Patel said the counting is still underway.

People, however, still had time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30.

Doing so would have defeated the very goal of demonetisation, the government said.

Other reports by Click Lancashire

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