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Lens on withdrawal sum; Govt bares retention plan

New Delhi: The Supreme Court on Friday directed the government to spell out by December 14 a minimum weekly withdrawal limit that banks cannot deny to customers, after the Centre said the previously announced Rs 24,000-a-week limit was a "ceiling, not a minimum". Many banks have been refusing this amount citing a cash crunch and forcing customers to settle for sums ranging anywhere between Rs 3,000 and Rs 10,000, senior counsel and Congress politicians Kapil Sibal and P. Chidambaram had earlier told the court. While clarifying on the matter, attorney-general Mukul Rohatgi said the government had no intention of replacing the entire volume of the old notes in new currency: it would leave a gap of Rs 1.5 lakh crore to promote cashless transactions. The bench of Chief Justice T.S. Thakur and Justices A.M. Khanwilkar and D.Y. Chandrachud was hearing a batch of 32 petitions and applications from individuals, groups and political parties complaining about the hardship caused by demonetisation. At the next hearing on December 14, the court will sift through them and frame the questions it needs to answer, including one on the constitutional validity of the demonetisation and the curbs on cash withdrawals. Justice Thakur indicated that if necessary, the court might refer the matter to a five-judge Constitution Bench. "We assume you (the government) are capable (of replacing the withdrawn currency). Your estimate shows you are in a position (to do so) but what has happened?" Justice Thakur asked. Rohatgi said the government needed time till December 31. "Are you agreeable that if there is a (lower) limit imposed by us, then no bank will deny withdrawal of the money? We will make sure that Rs 24,000 is withdrawn by each person?" the Chief Justice said. Rohatgi clarified: "The Rs 24,000 limit is a ceiling, not a minimum limit." The bench then said: "If he (customer) has a legitimate right, then let there be a limit below which banks cannot deny." Rohatgi said the government would then have to rework the limit. "If not Rs 24,000, let it be Rs 10,000, but it must be given," the Chief Justice said. The court quizzed the government on the speed of currency replenishment. "How much money is being printed? How much is being infused?" it asked. Rohatgi said the government had so far collected between Rs 11.5 lakh crore and Rs 12 lakh crore in old currency, having initially expected about Rs 10-11 lakh crore. "It (the government) may get another Rs 1 lakh crore." Justice Thakur said the court was conscious of the "larger objective" of the demonetisation but asked whether the government had "properly applied (its) mind" while undertaking the drive. "Was there any material before you that were apprised? How much money will be lost? How we will meet the situation? Was there a plan (about what the) banks should have to take care of when a situation like this arises?" he asked. "It is one thing to completely stop (the use of old notes) and another thing to intelligently regulate." Rohatgi acknowledged "some amount of inconvenience" to the people but cited the incentives for digital transactions that the government had announced yesterday by offering concessions at petrol stations and in insurance payments, among other things. "We many not put back, say, (rupees) one-and-a-half lakh crore back into the economy (in cash). You don't require it when you are going for digitalisation," Rohatgi said. Chidambaram, representing certain district cooperative banks from Maharashtra, said the government had got back about Rs 12 lakh crore of demonetised money but had so far released only Rs 3 lakh crore in new currency. (Last night, the government updated the figure to Rs 4.28 lakh crore). He said the country's four currency printing presses would take another six months, going by their capacity, to infuse the remaining cash back into the system. "They have no option but to ration, ration our own money. The rationing is irrational," he argued, adding that many banks were closing their counters by noon saying they had no cash. Chidambaram said just 35 per cent of the country's 2 lakh ATMs had some money, and that 13 states and the 7 Union territories together accounted for just 10 per cent of the total ATMs. The Northeast had only 5,000 ATMs, of which Assam alone accounted for 3,000, he added. The district cooperative banks he was representing have challenged the government's decision to stop cash deposits and withdrawals from them, arguing the Reserve Bank had no jurisdiction over them. Chidambaram questioned the curb, arguing that 90 per cent of the primary agricultural cooperative societies had fulfilled their know-your-customer norms. Rohatgi replied that each of the thousands of these cooperative societies had about 10,000-odd members, making it difficult to verify the credentials of each. Some of them could be terrorists or money-launderers, he said. Chidambaram said no cabinet note had been circulated on November 8 when demonetisation was announced. "Let them produce the cabinet note if they have it," he said. Sibal was appearing for a group of public interest petitioners
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