The 275 branches of District Cooperative Central Banks in Telangana are eagerly awaiting the outcome of a writ petition in the Supreme Court to be heard on Friday, challenging the notifications of the Reserve Bank of India and the Union government that prohibited district cooperative banks from accepting or allowing exchange of the demonetised Rs. 500 and Rs. 1,000 notes.
The notifications that allowed the banks to exchange old currency from November 9 to 13 had dealt a death blow to the rural economy in Telangana as institutional finance was abruptly stopped at the peak of agricultural operations.
The farmers were in possession of amounts ranging from Rs 20,000 to Rs 50,000 in old notes but they are neither able to deposit or exchange the money in branches of DCCBs where they had accounts nearer home, the DCCBs said.
As a result, the business of DCCBs had come to a standstill in Telangana, according to Telangana State Cooperative Bank chairman K. Ravinder Rao. He said the DCCBs were 100 per cent KYC-compliant and were on core banking solutions platform. Aadhaar seeding was completed for 70 per cent of members.
The banks were also equipped with fake note detectors.
The branches of DCCBs are the primary source of lending for agriculture to their 35 lakh members, of whom 15 lakh are active borrowers.
