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Public opt for non-cash transactions in co-operative banks in Kannur, Kozhikode

According to Income Tax officers, customers can either wait till the government comes out with an alternative or transact the fund using cheque, RTGES or DD.

Published: 16th November 2016 01:17 AM  |   Last Updated: 16th November 2016 08:04 AM   |  A+A-

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Express News Service

KOZHIKODE/KANNUR: Hard cash transactions in service cooperative banks in Kannur and Kozhikode have come to a standstill forcing the customers to opt for transactions via demand draft, cheques and RTGES. As flow of liquid cash to nearly 230 cooperative banks has dried up considerably ever since demonetisation, transactions through demand draft and cheques are taking place even as customers are making a hue and cry for liquid cash. Kannur houses 134 cooperative and service banks, while Kozhikode has 98 banks.

According to Income Tax officers, customers can either wait till the government comes out with an alternative or transact the fund using cheque, RTGES or DD. “Once they use the second option, money will come into the accounting system and become transparent,” the officers said.

Bank officials have urged the customers to do transactions using cheques and DD, fulfilling tax obligations and reveal source if required. “We are facing cash shortage to provide liquid cash to customers who want to withdraw money. But we have been able to do transactions using cheques and demand drafts. There is no other alternative.

Customers have to fulfil tax obligations if they want to do transactions,” said Calicut North Service Cooperative Bank secretary Anitha Kumari. The officials said interest accrued from fixed deposits would also come under the tax net. Though the amount invested under 80C of the Income Tax Act is exempt, the interest earned from such investments is taxable. If the interest exceeds `10,000 in a financial year, it will be eligible for tax deduction at source (TDS) at 10 per cent plus 3 per cent education cess.

“As per the RBI’s latest guidelines, we cannot accept demonetised currencies from our account holder as deposits,” said Kannur District  Cooperative Banks president Balakrishnan A K. “Cooperative banks across the state will remain closed on Wednesday. The employees will organise dharnas across the state to protest against the Union Government’s decision to isolate cooperative banks which are not in a position to accept deposits in cash or give money to customers,” he said.

“Each household in Kannur has an account with a cooperative bank. Traders and other people are regular depositors in these banks and the stalemate has hit the transactions,” said  Kerala Vyapari Vyavasayi Ekopana Samithi president T Nazirudden.



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