Demonetisation: Cooperative banks threaten to close shop due to cash crisis

With bank employees facing the ire of customers on a daily basis, the current situation may force cooperative banks to suspend operations till cash is more easily available in the market.

Written by Partha Sarathi Biswas | Pune | Published:November 16, 2016 3:54 am
demonetisation, note demonetisation, cooperative banks mumbai, mumbai banks, mumbai banks shuts down, indian express, india news Maharashtra Urban Co-Operative Banks Federation Limited, said cooperative banks have been unable to meet the demands of their customers. (File)

Cooperative banks in Maharashtra have “threatened” to suspend operations because of the Reserve Bank of India (RBI) and commercial bank’s “failure” to meet their demands for enhanced cash supply. Maharashtra has 508 cooperative banks with almost 2.5 crore customers.

After the Centre withdrew higher denomination notes of Rs 500 and Rs 1,000 last week, banks have been dealing with a heavy rush of customers who are scrambling to get their old notes changed and deposit the old ones in their accounts. While commercial banks and banks with currency chests have managed to meet customers’ demands, cooperative banks have been complaining about the unavailability of cash since day one.

Vidyadhar Anaskar, president of the Maharashtra Urban Co-Operative Banks Federation Limited, said cooperative banks have been unable to meet the demands of their customers, who want to either change the withdrawn notes or deposit the demonetised notes in their accounts.

“The commercial banks have not only refused to meet our cash demands, they are not even accepting deposits from us,” he said.

Anaskar, who is also the chairman of Vidya Sahakari (Cooperative) Bank, said all the lockers in the bank’s branches were full. “We don’t have space to store cash deposited by customers, and we don’t have enough cash to meet their demand for currency change,” he said.

With bank employees facing the ire of customers on a daily basis, Anaskar said the current situation may force cooperative banks to suspend operations till cash is more easily available in the market. According to him, the “failure” of commercial banks to dispense cash or accept deposits has caused immense hardship to the consumers.

Arvind Khalatkar, chairman of the Janata Sahakari Bank, also complained about the non-availability of adequate cash from the RBI. However, he said the central bank had released Rs 15-16 crore to the bank, which had been distributed among all the branches. “Our ATMs, though calibrated, are not functional in want of enough change,” he said.

The RBI has recently given Rs 15-20 crore to the Cosmos Cooperative Bank, one of the rare banks to have a currency chest, said Vikrant Ponkshe, managing director of the bank. He said though the money has been given for disbursement among all the branches, “the Indore branch of the bank has not been able to get enough cash.”