The Bombay High Court has posted for hearing on November 24 the petitions filed by district cooperative banks on demonetisation issue. It has however said some arrangements will have to be made to address their grievances.
The Mumbai, Solapur and Pune district central cooperative banks had approached the high court last week challenging the RBI circular of November 14, restricting them from exchanging or depositing old currency notes of Rs 500 and Rs 1,000 which were declared as illegal tender under the government’s demonetisation move on November 8.
In Kerala the issue of PACS came for hearing in the high court. Primary cooperative banks in the state cannot be considered as banks, central government and Reserve Bank of India (RBI) has informed the Kerala High Court, reports Times of India.
Following the submissions, the court has now asked primary cooperative banks who approached it to produce their byelaws. The primary cooperative banks have filed petitions seeking a directive to allow them to accept the recently-demonetized currency notes from the public and provide new ones instead.
The court was told by the central government and RBI that only financial institutions that have obtained licences as per central banking regulation can be considered as banks. Though primary cooperative banks are conducting financial transactions, they do not fall under the definition of banking, the court was informed.