The Madras High Court today sought to know from the RBI when new Rs 500 notes would be made available in Tamil Nadu to ease the present cash crunch situation following demonetisation.
RBI submitted that it faced practical difficulties in transporting currency in view of seizure of over Rs 500 crore by poll authorities in Tamil Nadu two days before the May 16 Assembly election.
"RBI has stopped transporting currencies through private agencies. Now it is made only through government agencies," counsel for the central bank submitted in the court.
The matter relates to a petition seeking a direction to the Registrar of Co-operative Societies to follow procedures laid down by RBI relating to demonetisation and permit cash withdrawal and exchange of old currencies in the societies.
Hearing the matter, the court observed that a volatile situation prevailing in the country would be solved only if RBI starts distributing the currencies of Rs 500 denomination.
The court asked RBI counsel "people are suffering, there is no doubt in it. Let us see how to improve the situation, when will Rs 500 denomination currencies be made available to the people?"
To this, RBI counsel referred to the difficulties and assured the court that he would convey the concern to RBI officials. He said the court would be apprised on the tentative date of currencies reaching Tamil Nadu.
On the point of permitting district central cooperative banks to exchange the demonetised currencies, the counsel said, "The decision to ban DCCBs from exchanging notes was made apprehending malpractices."
After recording the submissions, the court posted the matter for further hearing to November 18.
Election authorities had seized Rs 570 crore cash from three containers in Tirupur District on May 14, two days before the Tamil Nadu polls.
SBI had said the money belonged to it. It said the cash was being transported from Coimbatore to Visakhapatnam. It had said that the cash transfer was duly authorised by RBI.
The matter, however, went to the Madras High Court and later CBI registered a preliminary enquiry.
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