Before moving the resolution, Chief Minister Pinarayi Vijayan assured the house that the state would not lose a single rupee put in the cooperative banks and his government would stand guarantee for it.
He also said that an all-party delegation would meet Prime Minister Narendra Modi and Finance Minister Arun Jaitley on November 24 to take up the case of the cooperative banks.
Bharatiya Janata Party (BJP) member Rajagopal's attempt to move an amendment to the motion was shot down by State Water Resources Minister Mathew T. Thomas quoting rules and procedures that were upheld by Speaker P. Sreeramakrishnan.
The special session was called after both the ruling CPI(M)-led Left Democratic Front (LDF) and the Congress-led United Democartic Front (UDF) attacked Modi for excluding the cooperative banks from the accepting or exchanging the spiked Rs 500 and Rs 1,000 notes.
The cooperative banking sector in Kerala is a three-tier system, with about 1,600 primary cooperative banks attached to 14 district banks, which are further linked to the apex Kerala State Cooperative Bank (KSCB).
The total deposits in these cooperative banks, according to Kerala Cooperation Minister A.C. Moideen is around Rs 1.27 lakh crore.
Former Chief Minister Oommen Chandy said the biggest beneficiary of the past two weeks was the e-wallet, Paytm, that had spent Rs 50 crore in their advertisement applauding Modi. Paytm's business has doubled, he said.
"This is nothing but financial fascism unleashed by Modi and the way it was done clearly shows that this was a foolish decision," Leader of Opposition Ramesh Chennithala said.
Former Chief Minister V.S. Achuthanandan slammed the state BJP president, Kummanem Rajasekheran, for applauding the decision of sidelining the cooperative banks and demanded that he be driven out of the state.
State Finance Minister Thomas Issac recalled that recently Jaitley had said that though Kerala accounts for 53 per cent of the total cash transactions in the cooperative sector in the country, the demonetistaion move would not harm the state.