Banks with currency chest need to boost supply for crop: RBI

RBI said there is a perception that banks with currency chests are giving priority to their own branches to supply cash and asked them to quell the misinformation.

By: PTI | Mumbai | Published:December 2, 2016 4:27 pm
Reserve Bank, Banks, currency chest, demonetisation, demonetisation farmers, news, latest news, India news, national news As per estimates, the planting season requires Rs 35,000 crore in the form of crop loan to farmers, that is Rs 10,000 crore a week.

The Reserve Bank on Friday nudged banks managing currency chests to engage district co-ordinators of state level bankers’ committee to ensure fair and even flow of money to farmers for their winter crop requirements in view of cash shortage post demonetisation. To ensure adequate allocation of banknotes is made for rural branches, post offices and DCCBs, banks are advised to involve the district co-ordinators (Lead District Managers) functioning under State Level Bankers’ Committee (SLBC) in facilitating/planning distribution of currency from currency chests, RBI said in a notification.

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RBI also said there is a perception that banks with currency chests are giving priority to their own branches to supply cash and asked them to quell the misinformation.

“These banks with currency chests are, therefore, advised to make visible efforts to dispel the perception of unequal allocation among other banks and their own branches,” RBI said. Earlier, on November 22, RBI in an advisory to banks had asked them to make cash available to farmers for rabi crop season. As per estimates, the planting season requires Rs 35,000 crore in the form of crop loan to farmers, that is Rs 10,000 crore a week.

During the planting season, which concludes generally by the end of December, NABARD will utilise its own cash credit limit of Rs 23,000 crore to disburse crop loans. As these loans are given in cash, RBI has asked banks with currency chests to ensure adequate cash supply to district co-operative and regional rural banks.

Adequate cash supply should also be ensured for rural branches of all commercial banks, RBI stated. Bank branches in Agricultural Produce Market Committee (APMCs) are also to be supplied with enough cash to meet farmers’ demand.