Pune DCCB Moves SC Seeking To Be Treated On Par With Other Banks [Read Petition]

After the general public approached the Supreme Court over the issue of demonetization, the Pune District Central Co-operative Bank Ltd (DCCB) on Friday moved the apex court against the RBI’s “discriminatory” rules, under which banks refused to accept old notes (Rs. 500 and Rs. 1000) worth more than Rs. 22 crore (which was in the bank’s chest) before demonetization on November 8, 2016.

The Chief Justice of India (CJI) JS Khehar-led bench issued notices to RBI and Ministry of Finance and sought response on the co-operative bank’s plea, claiming it should be treated on par with other commercial banks, public sector banks and private banks.

Appearing for the bank, former Finance Minister P. Chidambaram submitted that old notes worth Rs. 22,25,10,500 has been lying with the co-operative bank and due to RBI rules, the Central bank refused to issue new denominations in exchange of  these old notes.

On November 17, 2016, the RBI issued circular directing banks not to credit cash before November 8, 2016, tendered by DCCBs.

As per the petitioner bank, other public sector banks, private sector banks, foreign banks, regional rural banks were permitted to deposit their cash in hand (SBNs) upto December 31, 2016.

The co-operative bank had also requested the Central Bank of India to accept its SBNs with linked chest currency, but, the central bank refused it, citing the RBI circular.

According to the petition, the cash in hand (Specified Bank Notes) with its 261 branches & head office across the state of Maharashtra was Rs. 21,96,25,500,  Cash (SBN) deposited in ATMs & in transit was Rs. 27,19,000. In addition, an amount of Rs.1,66,000 (the money was case property in the ATM theft case) was kept with Malegaon Branch as per the court’s order. In total, it had Rs. 22,25,10,500.

On June 29, this year, the RBI issued another circular directing DCCBs to deposit SBNs upto July 19, 2017, but only deposits accepted between November10 and 14, 2016, from customers and not cash in hand of the bank as on November 8, 2016.

The petitioner bank on June 30, 2017, wrote letter to the Chief General Manager, RBI, thereby, requesting that the RBI circular ( 29.6.2017) needs to be amended, so as to permit DCCBs to deposit SBNs forming part of cash in hand as at close of 8.11.2016. Till date, the RBI has not responded on the same.

Read the Petition Here