Note ban: Kerala government seeks Centre's intervention; CM writes to Modi

Thiruvananthapuram: Kerala government on Thursday sought Centre's immediate intervention to overcome the administrative stalemate and hardships being faced by people following demonetisation of Rs 1,000 and Rs 500 notes.

In a letter to Prime Minister Narendra Modi, Chief Minister Pinarayi Vijayan requested that permission be granted to the district cooperative banks in the state to exchange the demonetised notes.

This was required as the present situation was causing problems to carry out day-to-day business of the state government, he said.

Pointing out that the cooperative institutions, which have deposits of over Rs 75,000 crore, were the backbone of the state's agriculture and retail sector, he said cooperative banks should also be allowed to withdraw enough funds from the banks to make the exchange process hassle-free.

"As a person who has worked in the cooperative sector for many decades and having realised the significant role played by it in many states, you (PM) should immediately intervene in the matter," the Chief Minister said.

Vijayan also noted that though the letter sent by the PM to the state government had clearly stated that the State Road Transport Corporation, crematoriums, milk outlets and super markets run by consumer cooperative societies could transact business with the demonetised notes, it was not mentioned in the related Reserve Bank circular in this regard.

He also requested extension of the deadline for accepting the old notes by these sectors at least up to November 18 to bring the situation back to normal.

Besides these sectors, more public utility services like electricity board and water authority and state-run financial institutions such as the financial corporation and financial enterprise should be allowed to accept old notes, he said.

"The functioning of the state treasury will come to a standstill if concessions are not extended," he said. In this regard, the Chief Minister also said banks were now extending only a limited sum as imprest amount and if this was not enhanced the treasury system would be severely hit.

Kerala Finance minister, T M Thomas Isaac, also wrote a similar letter to Union Finance minister Arun Jaitley.