MANGALURU: While many representatives of farmers’ societies were willing to follow the Reserve Bank of India norms to be eligible as “banks” to overcome the demonetisation blues, the South Canara District Cooperative Central (SCDCC) Bank, as an interim measure, on Tuesday decided to urge the State government to extend the deadline for agriculture loan repayment till normality is restored. The bank had convened a meeting of heads of primary agriculture credit societies (PACS) and the Vyavasaya Seva Sahakari Sanghas here to discuss ways to face the demonetisation impact. Bank president M.N. Rajendra Kumar said keeping PACS out of “bank” definition has adversely impacted the rural economy.
He said more than 60 per cent rural population transacts through the cooperative sector. Prohibition on PACS from receiving demonetised notes has affected them. RBI’s treatment of PACS on par with individuals limiting their cash withdrawal to Rs. 50,000 a week has affected cash flow. This issue should be raised with RBI and the Union government.
Mr. Rajendra Kumar also feared PACS could be in trouble if agriculture loans are not repaid by March 2017 following demonetisation. PACS’ trouble would impact the whole cooperative sector.
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Ready for KYC
Presidents/ CEOs of PACS and VSS said SCDCC Bank has to take the lead in urging RBI not to equate cooperative banks with individuals. At the same time, PACS cannot sit dumb to the changing irreversible economic trends and should ask the RBI/ Union government to provide them IFSC codes to function as regular banks. “We are ready to follow KYC (know your customer) norms and even pay income tax on profits earned,” one said. Another said cooperatives earned a bad name because some began functioning as “finances” offering lucrative rates of interest on deposits throwing all norms.
Another representative said PACS are prepared to go for cashless transactions and SCDCC Bank should take the lead in implementing the same.
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Those who spoke included Prakashchandra Shetty from Khambadakone CA Bank, Thimma Poojary from Kota CA Bank, M.S. Gokhale from Mundaje PACS, Vasanth Majal from Belthangady PACS, G. Anand from Bantwal VSS, Mahesh Hegde from Molahalli VSS and others. The meeting also resolved to urge the state government to take up the issue of hardship to cooperatives with the Central Government.