Relief for PDCCB as Supreme Court stays NABARD circular

NABARD, demonetised currency, PDCCB, old notes deposited into

Written by Parthasarathi Biswas | Pune | Published: March 29, 2018 7:52:13 am
In a relief to the beleaguered PDCCB, the Supreme Court has allowed the bank to show the Rs 22.25 crore it has, in old currency notes, as cash in hand. (Express Photo by Tashi Tobgyal) 

In a relief to the beleaguered Pune District Central Co-Operative Bank Ltd (PDCCB), the Supreme Court has allowed the bank to show the Rs 22.25 crore it has, in old currency notes, as cash in hand. The apex court allowed this while hearing a petition filed by the PDCCB against an order by the National Bank For Agriculture And Rural Development, or NABARD, to show the same as losses in their balancesheet.

Maharashtra has 31 district central co-operative banks and some of them — located in Pune, Kolhapur, Sangli, Ahmednagar, Amravati, Nagpur and Wardha — still have old currency notes amounting to around Rs 110 crore. These notes were deposited with the banks before demonetisation was announced on November 8, 2016. While the RBI had allowed the DCCBs to exchange Rs 2,000 crore deposited with them between November 8 and 14, it had refused to allow the exchange of currency notes deposited before the demonetisation announcement.

NABARD — the supervisory body of the DCCBs — had, in January this year, asked PDCCB to provision the old currency notes as losses for the financial year ending on March 31. This would have translated to a loss of Rs 22.25 crore for the PDCCB which, said bank chairman Ramesh Thorat, would have seriously compromised the financial health of the bank.

During the hearing, the court allowed PDCCB’s plea to show old currency notes as cash in hand and not as losses. The apex court has also given NABARD two weeks’ time to file its response. PDCCB chief Thorat welcomed the decision.

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