MUMBAI: Maharashtra’s 31 district central cooperative (DCC) banks are sitting on a cash pile of Rs. 4,000 crore in old notes. They now have to wait for the Reserve Bank of India (RBI) to allow exchange with other banks, virtually bringing the cooperative banking sector on the verge of collapse.
In addition, the demonetisation has affected 1.14 crore account holders, majority of them farmers, from 21,085 primary agricultural credit societies (PACS) at village level, which too have been barred from either exchanging old notes or receiving cash. The State has over 3,000 branches of DCC banks with approximately 38 lakh account holders. Barring examples such as Mumbai DCC Bank, majority of branches serve farmers.
“The DCC banks are sitting on a cash pile of Rs. 4,000 crore which they cannot use nor deposit in nationalised or private banks since the RBI has barred us from doing so. Our primary demand is to allow us to exchange these specified bank notes (SBN) and if that cannot be done, at least allow us to deposit the money in other banks,” said Pramod Karnad, Managing Director, Maharashtra State Cooperative (MSC) Bank Limited.
The MSC Bank stands at the helm of Maharashtra’s three-tier cooperative credit structure, with DCC banks in the middle, and PACS at the bottom.
According to the Maharashtra State Cooperative Banks Association, around eight lakh citizens are dependent only on DCC banks. “This is not a political issue, but it deals with the livelihoods of people. As per our data, Maharashtra has several places where only DCC banks work. What these people are expected to do?” asked Swati Pande, CEO of the association.
According to sources in the State’s Cooperation Department, the RBI is firm with its stand of not allowing leniency towards cooperative banking structure. State’s Finance Minister Sudhir Munguntiwar had advocated the RBI move, claiming the DCC banks lack a monitoring system to keep tab on counterfeit notes.
Leader of Opposition in the Assembly Radhakrishna Vikhe-Patil slammed the government for making farmers suffer by putting restrictions on the DCC banks. The Shiv Sena too is up in arms against the government, when its Lok Sabha MP Anand Adsul even threatened to walk out of the alliance. He later withdrew the statement.
Meanwhile, Chief Minister Devendra Fadnavis tweeted on Monday evening that farmers can now buy seeds for rabbi crop in SBNs.
