Co-operative banks hit in demonetisation says union prez

Mangalore Today News Network

Nov 24, 2016: Speaking at a meeting to discuss the impact of demonetisation on co-operative sector,  the Udupi district Co-operatives’ Union president Kishan Hegde Kolkebailu said demonetisation of currency notes of Rs 500 and Rs 1,000 denomination is a welcome move. However the decision to prohibit co-operative banks from exchanging or accepting deposits in scrapped notes is condemnable.

Co-operatives’ Union president, Kolkebailu said the government should allow the co-operative banks to function normally. He said the co-operative banks had been prohibited from accepting old currency either for deposits or towards loan repayment and this in turn had hampered the normal operations in the banks. Bank customers are in a quandary as the Reserve Bank of India had been changing rules frequently, he said.

He said there were around 53 agricultural co-operative societies and 235 credit co-operative societies with 3.75 lakh members in the district.The banking activities have come to a halt in the aftermath of the demonetisation of the currency.

He said that loan repayments too have come down and the RBI rule was preventing the banks from paying deposit money back to the customers.

He said that around 60% of the banking operations in rural areas is in co-operative sector. The decision of the Union government to keep co-operative banks away from demonetisation, has affected common man. The co-operative banks would approach court over the discrimination.

Badagubettu Credit Co-operative Society general manager Jayakar Shetty Indrali said the Reserve Bank of India had responded to the grievances of the co-operatives. He also requested the customers not to pay heed to rumours against co-operative banks.