DCCB's not permitted for exchange of demonitised notes

The RBI has advised all banks to permit withdrawal of cash by DCCBs from their accounts based on need.

Published: 15th November 2016 12:48 AM  |   Last Updated: 15th November 2016 12:48 AM   |  A+A-

money reuters

For representational purpose (File|Reuters)

By Express News Service

BHUBANESWAR: In a major setback to the District Central Cooperative Banks (DCCBs) which provide banking services to a large number of farmers, the Reserve Bank of India (RBI) today withdrew the exchange facility against the demonitised currency notes.

"It is clarified that District Central Cooperative Banks can allow their existing customers to withdraw money from their accounts upto  Rs 24,000 per week upto November 24, 2016. However no exchange facility against the specified bank notes (Rs 500 and Rs 1000) or deposit of such notes should be entertained by them," a notification of the RBI said.

The RBI has advised all banks to permit withdrawal of cash by DCCBs from their accounts based on need. The cash withdrawal limit of Rs 24,000 per week is not applicable to withdrawal of cash by a DCCB from its account with any other bank.

The RBI decision will affect more than 55 lakh farmers' families who are members of the primary agriculture cooperative societies (PACS) and depend on the DCCBs, said a senior executive of the Odisha State Cooperative Bank (OSCB).

However, the exchange facility for the specified bank notes will continue in the 14 branches of OSCB, the apex cooperative bank and urban cooperative banks.

The DCCBs having 355 branches in the state have been receiving deposits of Rs 500 and Rs 1000 notes in the last three days after withdrawal of the legal tender character of the two notes.

Since the DCCBs are serving areas where commercial banks have no presence, the RBI decision will affect a large number of the people. The restriction on the DCCBs is unwarranted as these cooperative banks are functioning under the supervision of Registrar of Cooperative Societies, sources in the cooperation department said.

The Cooperation department is reported to have requested the state government to take up the matter with the Centre for the greater interest of the farmers.

The OSCB with its 14 branches in the state including seven branches in the city is facing cash crunch due to non-release of required cash by RBI. The apex cooperative bank has requested the federal; bank to provide Rs 10 crore to meet the demands of the account holders.
 

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