Extending time to deposit old notes defeats demonetisation: Centre to SC

New Delhi: The Centre on Monday told the Supreme Court that giving people additional time to deposit the old notes will defeat the point of demonetisation and its battle against black money, NDTV reported.

Earlier in June, the apex court observed that citizens with valid reasons -- such as imprisonment -- could not be deprived of an opportunity to exchange old notes, giving the Centre and Reserve Bank of India two weeks to come up with a solution. It had asked the government to consider creating a window for people with such legitimate reasons to deposit scrapped notes.

The Supreme Court had clubbed together different citizens which included a woman who had delivered a baby during the time of demonetisation and another who was coping with the death of a family member, the report added.

"If there is a genuine person, he should have the opportunity if he has failed to deposit for a valid reason. You can't take his money away, it is his money," the Chief Justice of India, JS Khehar said at the last hearing on July 5.

Prime Minister Narendra Modi in 2016 had announced the demonetisation of 500 and 1000 Rs notes with a deadline of December 31 for people to deposit or exchange the old notes. The move had led to the withdrawal of 86 per cent of India physical currency. The Centre had later introduced a new Rs 500 and Rs 2000 note with the aim of fighting corruption and eliminating black money.

In a meeting with the parliamentary committee on Wednesday last week, RBI governor Urjit Patel said the number of scrapped notes returned post demonetisation were still being counted.

In the meeting which lasted more than three hours, the central bank chief faced a lot of questions from the members. However, members expressed displeasure over Patel failing to provide any 'specific number' on the amount of money returned to the banking system post the note ban in November, 2016.