The president of the Kollam District Cooperative Bank, K.C. Rajan, has said that the Central government appears to be pursuing a policy aimed at destroying the cooperative banks of the country and this is the main cause of the crisis faced by such banks now.
Talking to media persons here on Thursday, Mr. Rajan, who is also a KPCC general secretary, said that following the demonetisation of higher denomination currencies on November 8, Rs.177 crore was lying piled up in the District Cooperative Bank and other primary cooperative banks in Kollam district.
This was because the cooperative sector banks had been denied playing any role in exchanging the demonetised notes or accepting such notes as deposits. He said the cooperative institutions in the district comprising the District Cooperative Bank with its 63 branches and 1,200 other institutions together had deposits touching about Rs.4,000 crore.
As a result of the Central government decision, the operations of the District Cooperative Bank and the primary cooperative banks have come to a standstill. This has created much anxiety among those who have deposits in such banks.
Those heading the cooperative sector are also thinking on the lines of moving the court against the Central government embargo on cooperative banks. The district cooperative banks functioned purely under the Reserve Bank of India guidelines and such banks should not have been isolated, he said.
The deposits in cooperative banks were mostly from the common man and the attraction for them was the higher interest rate offered compared to the nationalised banks, Mr. Rajan said. But a twist was now being given to paint a good portion of such deposits as black money and that was unfortunate, he said.
