MUMBAI: The Reserve Bank of India’s (RBI) decision to bar District Central Cooperative Banks (DCCB) in the State from accepting or exchanging demonetised currency notes was not based on factual data, the reply to an RTI query has revealed.
The RTI application filed by activist Anil Galgali sought details of irregularities by district and State cooperative banks that RBI might have encountered between November 8, when high-value notes were scrapped, to December 10. In reply, the RBI’s Public Information Officer A.G. Ray said the information sought is not available.
Restrictions were imposed on DCCBs after it was found that over ₹5,000 crore had been deposited in 31 such banks within three days of the demonetisation move.
New currency was not made available to them either by the RBI, bringing banking operations at DCCBs to a near-standstill.
Opposition parties are claiming the move adversely impacted farmers, who mostly bank with DCCBs. The RBI restrictions on DCCBs was criticised by ruling alliance partner Shiv Sena as well, which demanded they be lifted. While Chief Minister Devendra Fadnavis of the BJP conceded that farmers have suffered to an extent, he said during the Legislative Assembly’s winter session in Nagpur that the restrictions were imposed to curb malpractices and irregularities, as large amounts of cash were deposited in these banks overnight.
The Opposition is likely to highlight the RBI’s reply to Mr. Galgali’s RTI query in the run-up to elections to 25 zilla parishads. “The government’s claims were unsubstantiated, and the [RBI] decision has hit millions of farmers and the rural population, whose only access to formalised banking continues to be through these banks, which have networks in the most remote parts of the country,” Mr. Galgali said.
According to the Maharashtra State Cooperative Banks Association (MSCBA), the decision to single out DCCBs was not only unjust, it jeopardised their balance sheets. “There could have been alternate ways to control irregularities in these banks, but these restrictions have hit the foundation of the banks, which has ultimately hit those dependent on it,” said Swati Pande, CEO, MSCBA.
