Co-operative sector employees, most of them women, took out marches and staged dharnas in district centres, including Thiruvanathapuram, to press the Centre in this regard.
Inaugurating the march taken out to the RBI office here, CPI(M) veteran V S Achuthanandan said demonetisation had affected the common man.
Achuthanandan also flayed the Centre and Prime Minister Narendra Modi over the decision to use indelible ink to mark customers exchanging defunct currency.
Employees protested the "false" campaign that black money was deposited in huge amounts in the Co-operative sector banks in the state and claimed that it was a deliberate attempt to destroy the sector, that plays a vital role in the state's economy.
The employees also alleged that Income Tax Department was showing an antagonistic approach towards the cooperatives in the state.
Kannur district, which reportedly has maximum number of cooperative societies, witnessed a huge protest by the staff.
District Congress Committee (DCC) president K Surendran and CPI(M) district secretary P Jayarajan were also present.
The CPI(M)-led LDF government in Kerala had yesterday asked the Centre to allow district Co-operative banks and primary agriculture credit society to exchange defunct notes, saying any disruption in the sector would result in irreparable damage to the state's economy.
State Minister for Co-operation A C Moideen had also sent a letter to Finance Minister Arun Jaitley, stating that there was no reason to distrust the District Co-operative banks as they were functioning as per RBI norms.