THIRUVANANTHAPURAM: A month after demonetisation, the state Treasuries Department is in possession of nearly Rs 15 crore worth stock of Rs 500 and Rs 1,000 currencies.
While the Department plans to approach the RBI to exchange these notes, mystery shrouds its choice to pile up the invalid notes rather than exchanging them with agency banks in time. Some officials, who did not want to be named, told this paper that this could be a deliberate attempt by the government to create another post-demonetisation crisis.
Invalid notes form part of the cash balance of state’s 222 treasuries, ie, a significant portion of the government’s reserve is now non-tenderable. As per RBI norms, liquid cash that can be kept in possession of all treasuries together is Rs 18-20 crore a day. This limit has now been exceeded, almost double.
Sources said the department’s choice to maintain the invalid note stock was surprising. “They could have exchanged it with the agency bank on a daily basis. Now, the RBI is being given an extra burden by submitting the notes en masse,” said an official with the Finance Department.
Each treasury has a public sector bank as ‘agency bank’ where it maintains an account. The bank would supply money in the morning and receives excess cash back at closing time on a a daily basis. State Bank of Travancore, which serves as the agency bank for close to 70 per cent of the treasuries said it did not prevent any treasury from depositing old notes. “The bank did not ban any treasury from depositing old notes. It would not have taken much time to give new notes as the stocks of individual treasuries aren’t huge,” said an official. It is learnt that some treasuries which deposited invalid notes in the first week after demonetisation were prevented by the Treasuries Department.
Treasuries Director J C Leela said the decision to exchange notes together was for convenience, but could not explain the benefits. The Department has asked all treasuries to bring the notes to Treasuries Directorate this week. Officials from treasuries as far as the Manjeswaram treasury in Kasargod will not get any police protection whatever the stock volume is.