Mumbai: The NABARD on Monday said it has submitted a report on deposits made in the District Central Co-operative Banks (DCCB) to the Reserve Bank of India (RBI) as per the latter’s request. The RBI had also asked NABARD to check Know Your Customer (KYC) documents with these banks.
“We were asked to prepare a report, which we have submitted to the RBI,” Dr. Harsh Bhanwala, chairman, NABARD said, but declined to share the findings. Swati Pande, CEO, Maharashtra State Cooperative Banks Association said the report did not find irregularities. “Had they found any, they would have taken action by now,” she said. A questionnaire sent to RBI by The Hindu was not answered.
With ₹2,772 crore in old ₹500 and ₹1,000 notes lying idle with DCCBs for the last six months, their ability to extend crop loans to farmers for the kharif season is being questioned. DCCBs provide around 30% of loans given to farmers by the banking sector for the season.\
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A State Cooperation Department official said DCCBs give short-term loans for seeds, fertilisers and pesticides, while nationalised and private banks concentrate more on long term loans for tractors and other farming tools. This makes DCCB loans vital to small farmers, he said.
Following the announcement of demonetisation on November 8, DCCBs had received cash deposits raising suspicion about the source of the money, following which these banks were asked to not accept discarded currency notes. With an embargo from Reserve Bank of India (RBI) on exchanging these notes with other financial institutions, the deposits continue to remain with the banks, on which DCCBs are paying interest for six months.
“This has not only broken the backbone of these banks but has raised questions over their existence in future. These banks have deposits of ₹2,772 crore with them for last six months which cannot be used at all. With this financial condition, how can these banks extend loan to farmers in this kharif season?” she said.
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For 2016-17, state government had set a target of ₹37,677.03 crore of crop loan disbursement out of which target of ₹33,414.85 crore was achieved to 48.31 lakh farmers. Of the total loan disbursed, DCCBs had contributed ₹12,777 crore, while nationalised and private banks had contributed ₹16,671 crore and ₹2,039.31 crore respecively. For 2017-18, the crop loan target has been increased by 5.83% which is likely to be finalised in the State Level Banker’s Committee (SLBC) to be held at June 1.
Raju Shetty, Lok Sabha MP from the Shetkari Sanghatana, a BJP alliance partner, said, “Where will farmers get their money from if banks don’t have money to give loans?”