While hearing PILs challenging legality of demonetization as well ban on district cooperative banks, the Gujarat High Court has asked the RBI whether it has powers to ban transactions at DCBs and restrict withdrawals following demonetization, reports Press Trust of India.
These PILs were filed by Gujarat Khedut Hitrakshak Samiti and Bhavnagar District Cooperative Bank (BDCB).The petitions also demanded quashing of the notification dated November 8 declaring demonetisation of high value currencies.
In one of the petitions, Bhavnagar District Cooperative Bank has argued that restriction on dispensing short term loans to farmers has broken their line of finance for raising crops, because of which “farmers would be ruined and they would not be able to purchase seeds, fertilizers, pesticides and other items”.
It also said DCCBs should be treated on a par with any other banks as per the RBI guidelines.
Earlier, the matter of demonetization was to come up for hearing in the Supreme Court on Tuesday but was postponed as the Chief Justice who was coming from Rajasthan could not make it as his flight got delayed.
Lending a boost to co-op bank claims Nabard submitted a report in the the Supreme Court favouring District Cooperative banks in the case related to demonetization. In its report Nabarad said most of the district cooperative banks followed KYC norms. These banks have faced no action for not following KYC norms barring a few,” say media reports.
The Bench is headed by the Chief Justice of India T S Thakur and included Justice D Y Chandrachud. The petitioners were represented, among other by two high-profile lawyers Kapil Sibal and P Chidambaram.
Next hearing is scheduled for coming Monday.