$88 Billion Of Old Notes Means Cheaper Loans: Centre To Supreme Court

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$88 Billion Of Old Notes Means Cheaper Loans: Centre To Supreme Court

Supreme Court had warned the centre that riots could result from the extreme cash crunch after notes ban


New Delhi: 

Highlights

  1. Centre says with old notes piling up in banks, loans will get cheaper
  2. Supreme Court had warned centre to minimise hardship for people
  3. Bank lines are much shorter now, reassures centre
The success of the scheme that cancelled 500 and 1,000-rupee notes to fight black money is now visible, the government asserted in the Supreme Court today, stating that the lines of people waiting at banks to get new notes have shortened considerably.

Listing benefits of the reform, the government told judges today that as old notes are deposited, "the real advantage is banks will have more money and interest rates for loans will come down." 88 billion dollars of old notes have been deposited so far, Attorney General Mukul Rohatgi disclosed.  

Last week, the Supreme Court had warned the government that riots could result from the extreme cash crunch that the country plunged into after 86 per cent of the notes in circulation were suddenly withdrawn on November 8.

Apart from the top court, petitions have been filed in courts including in Chennai and Kolkata asking for the demonetisation to be declared illegal, which judges have said they will not do because that would amount to interfering with a major government decision.

PM Narendra Modi has said the ban on high-denomination notes will attack the root of black money, corruption and counterfeiting. The initiative, while praised for its intent, has created a crisis for rural India which does not have bank access and operates in a cash economy.

The centre said that there is no shortage of the new 500 and 2,000-rupee notes and that it is transport problems that are causing some delays in the delivery of new bills to banks.

The judges today said that for now, they will not stop other courts from hearing appeals against the reform, but will, on December 2, consider the government's request to club together all the petitions and hear them in Delhi.


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