HYDERABAD: The business at 272 branches of cooperative central banks in Telangana came to a standstill as Reserve Bank of India (RBI) disallowed exchanging and depositing old Rs 500 and Rs 1,000 notes in these banks, thus hitting the business of these banks in a severe way.
The institution of cooperative central banks has been ingrained in our society with banks being set up from district level to mandal and village level. These banks serve farmers and there are about 22.98 lakh customers in cooperative banks in Telangana.
While cooperative central banks were allowed to exchange and deposit old Rs 500 and Rs 1,000 notes initially, RBI issued orders disallowing cooperative banks to take deposits of old notes from Nov 14.
As a result, the functioning of these banks, which have deposits to the extent of Rs 3,224 crore and issued loans worth Rs 5, 173 crore in Telangana, have been paralysed.
“Cooperative central banks have been serving rural populace and farmers for the past 100 years and these banks have been complying with all RBI rules. Citing irregularities in few states, cooperative banks in all the states have been barred from receiving old notes, though no irregularities have occurred in Telangana. How is this justified?” questioned K Janardhan Rao, general secretary of Telangana Co-operative Central Banks Employees’ Association.
Employees of cooperative central banks across Telangana held a day-long protest in Hyderabad demanding the Central government and RBI to allow the banks to accept old notes and also repayment of loans.
Post-demonetisation, old notes are being allowed for payment of outstanding dues to various government departments and also towards loans issued by banks and other financial institutions. Thus demonetisation drive has come as a blessing in disguise for several government departments and banks for recollecting their old dues.
In this backdrop, managements of cooperative central banks are hoping that, if old notes are allowed, a considerable part of customers may repay loans. “Post-demonetisation cooperative central banks from across state are getting requests for farmers and other customers for repayment of loans through old notes. But we are unable to take them.
We urge Central government and RBI to allow even cooperative central banks to take old notes as it will not just help banks but also farmers and other neglected sections,” said K Ravindra Rao, chairman of Telangana State Cooperative Apex Bank.