BHUBANESWAR: As demonetisation has hugely impacted cooperative banks in the state credit lending
for rabi crops has almost come to a halt, said Cooperation Minister Damodar Rout in the Assembly today.
Replying to a question of Congress MLA Chiranjib Biswal, the Minister said cooperative banks are facing cash crunch after RBI's restriction on the exchange of demonetized Rs 500 and Rs 1,000 notes.
Stating that the effect of demonetisation has severely impacted the operation of the cooperative credit structures across the country, Rout said farmers are facing insurmountable problems to meet their input requirements for rabi crops as credit flow from cooperative banks has dwindled.
The Minister said that the Odisha State Cooperative Bank had requested for Rs 100 crore for refinancing to the cooperative credit structures. However, only Rs 10 crore have been released to the apex cooperative bank.
Though the RBI has recently made some relaxation in the transaction norm for the cooperative banks, the latter is still running short of cash. Though farmers are granted agriculture loans, they are not provided with the money due to lack of hard cash in the banks.
However, there is some improvement in the situation and efforts are on to restore normal functioning of these banks, he added.
Taking note of the difficulties faced by the people in the withdrawal of money from the cooperative banks, the Chief Minster had written to Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley seeking their urgent intervention. Even the Reserve Bank of India was also urged in this regard, he said
The Minister said that 2076 out of 4345 cooperative societies are running with loss.