The demonetisation of Rs. 500 and Rs. 1,000 notes has badly hit cash transactions in the cooperative sector. The milk producers’ co-operative societies have not been able to withdraw weekly payments and cooperative banks are registering zero per cent loan recovery.
“It seems Prime Minister Narendra Modi has no knowledge of co-operative sector movement," said K. Sathish, chairman of the Hassan District Central Cooperative Bank. Speaking to The Hindu on Monday, he said transactions in the bank and its branches across the district have come to a standstill. The Reserve Bank of India gave the co-operative sector an instruction on November 14 against accepting old notes. “We have given a total of Rs. 500 crore in loans in the district. People repay through the year. And this is the harvest season. If someone has got money by selling his crop, he will come and pay an instalment. But we have been restricted from accepting the notes,” he said.
A majority of the milk producers’ co-operative societies have accounts in the DCC bank. They get weekly payments from the Hassan Milk Union, as per the quantity of milk they sell. “There are societies which supply as much as 3,000 litres of milk a day. They get lakhs of rupees every week. The money has to be distributed among milk producers. But RBI has restricted the withdrawal limit to Rs. 24,000 a week. How will they get cash and distribute it to all the producers?” he asked.
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Former Prime Minister H.D. Deve Gowda has written to the Prime Minister on the problems faced by co-operative banks. “The Centre’s move has badly hit the co-operative sector across the nation. Our banks need a long a time to recover from this bad situation,” he said.