Ease situation in coop banks: AIADMK

A delegation of party MPs led by Lok Sabha deputy speaker M Thambidurai submitted a memorandum to the finance minister asking him to also make necessary provisions to allow Primary Agricultural Cooperative Credit Societies (PACCS) to accept repayment of loans by cash (including Rs 500 and Rs 1,000 notes of the old series) subject to safeguards prescribed by RBI/GOI/State government. Meanwhile, the State Cooperative Minister Sellur K Raju held a consultation with the department officials regarding distribution of crop loans to farmer members of PACCS through district central cooperative banks (DCCB). Noting that crop loan to the tune of Rs 2,141 crore had been disbursed to 3,54 lakh farmers till November 8, 2016, as against the annual target of Rs 6,000 crore, the AIADMK Parliamentarians appealed to the Centre to give a special status to support agricultural operations by permitting district central cooperative banks to disburse beyond the stipulated Rs 24,000 per week to PACCS. 

The MPs said the DCCBs ought to be permitted to accept deposits in KYC complaint accounts on par with scheduled commercial banks as the restriction is discriminatory and would adversely affect the financial viability of cooperative institutions in the long run. The request has been made in tune with the special package, the state government had announced to save farmers from distress in the beginning of the agricultural season. 

The special package includes direction to DCCBs to open a new KYC complaint account in the name of loanee farmers of PACCS so that once the loan is sanctioned at the PACCS, a debit note would be send to DCCB branch concerned for crediting the amount to the account of farmers opened in DCCBS. The cash component of the loan would be credited in the account of the farmer who would be permitted to withdraw Rs 25,000 per week in cash as permitted by RBI, the memorandum reasoned.

In a huge relief to people of the State hit by shortage of smaller denomination notes post-demonetisation, banks in the state have received the first tranche of newly introduced Rs 500 notes and would start dispensing them to public from November 24.

In a huge relief to people hit by shortage of smaller denomination notes post-demonetisation, banks in the state have received the first tranche of newly introduced Rs 500 notes and would start dispensing them to public from Thursday. Many ATMs in the state have been calibrated to dispense the new notes senior officials said here on Thursday. “The Rs 500 notes which are expected to be in large circulation compared to the high value Rs 2,000 notes have reached all over Tamil Nadu. Some banks have received the first batch already. Some are receiving as we speak,” an official said. After the withdrawal of the old Rs 500 and Rs 1,000 notes under the demonetisation move, the Centre had released Rs 2,000 denomination notes. However, people have been facing difficulty in getting change for the Rs 2,000 note in view of shortage of smaller denominations.

This has affected trade, including small retailers and wholesale markets. “We have received one box of Rs 500 notes totalling to Rs 5 crore. Most of the ATMs have been recalibrated for the distribution,” a senior official of a nationalised bank said. Asked about the delay in availability of the new Rs 500 notes, another bank official said, “while most of these notes have already reached the banks in north India to meet the demand, we are getting them here now”. 

Several people since November 9 have been running from banks to ATMs to withdraw cash to meet daily expenses, but are stuck with the Rs 2,000 notes. While the government capped withdrawal from banks at Rs 24,000, it was fixed at Rs 2,500 for ATMs. Responding to a query by the Madras High Court, the Reserve Bank of India had last week submitted that it cannot disclose details regarding the timing of release of new Rs 500 denomination currency to the banks due to security reasons. Meanwhile, the All India Bank Employees’ Association, representing the private and public sector staff, has urged the Finance Ministry to direct the Reserve Bank to issue revised guidelines enabling cooperative banks to take up banking operations. About 65 per cent of the co-operative banks out of the total 10,000 engaged in banking business and handle about Rs 6 lakh crore towards working capital and deposits, said AIBEA, General Secretary, CH Venkatachalam.

Stating that several district-level central cooperative banks across the country were not allowed to carry out banking operations, Venkatachalam, in his letter to Finance Minister Arun Jaitley, said, “It is these base-level organisations which deal with majority of the banking public in villages and were also the prime source of distribution of essential commodities.”