Demonetisation: No respite for DCCBs

Kaumudi Kashikar Gurjar
Sunday, 25 June 2017

Union Finance Ministry has issued orders allowing these banks to deposit old currency notes lying with them since demonetisation with any RBI branch within 30 days.

Pune: Around Rs 2,772 crore in demonetised currency notes is still lying in over 31 district central cooperative banks (DCCBs) in the State.
This, despite Union Finance Ministry’s order allowing these banks to deposit old currency notes lying with them since demonetisation with any RBI branch within 30 days. The absence of RBI guidelines for this procedure is causing this roadblock.

Chief Executive Officer of Maharashtra State Cooperative Bank’s Association Ltd, Swati Pande said this clearly shows lack of coordination between the government and the agencies implementing the Government Resolution (GR). 

She drew attention to the fact that even after issuance of the GR on June 20, the RBI has not issued guidelines for it.  Pande told Sakal Times, “In absence of RBI guidelines the nationalised banks having RBI currency chest will not accept old currency notes.” Recently, DCCBs in the State had claimed to have faced a difficulty in raising money to extend crop loans as the sowing in Kharif season was going on in full swing.

The banks claimed they were finding it difficult to provide an advance of Rs 10,000 to every farmer until the criteria for complete loan waivers were formalised.

Chief Executive Officer of Pune DCCB, Dr Sanjay Kumar Bhosale, said, “We are going to appeal to the Supreme Court demanding compensation of Rs 20 crore as we have incurred a loss as interest on the deposits in past eight months.”

Pande said, “The banks have incurred losses close to Rs 230 crore as interest on the deposits. This is in addition to Rs 110 crore due to the maintenance of Cash Reserve Ratio, as banks had to show this deposition as cash in hand.”

Several checks done
A team of the regional office of NABARD conducted several checks at 31 banks to perform scrutiny of KYC forms filled during deposition of old currency. In case of Pune DCCBs, this exercise was done five times in last eight months. The association has sought a reply from RBI stating why no report was published after this. This has dented the image of DCCBs among the rural masses.

Troubled times since demonetisation
Five days after demonetisation, on November 14, 2016, RBI had told DCCBs that they will not be allowed to exchange or receive demonetised currency notes of Rs 500 and Rs 1,000.  It was suspected that banks being politically-connected, they might be used to stash black money.
Soon after RBI’s order, DCCBs stopped accepting old currency but around same time Central Bank too refused to exchange currency notes collected before November 14. Due to this, the banks from other states like Gujarat, Kerala and Tamil Nadu were hit by the diktat issued by RBI.

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