Co-op banks cry for cash, blame commercial banks for not following RBI norms

Given their ease of doing business, many small traders such as vegetable vendors and auto drivers have accounts with these banks.

Written by Parthasarathi Biswas | Pune | Updated: November 13, 2016 2:22 am
demonetisation, Rs 500 note, Rs 1000 note, Rs 2000 note, arun jaitley, demonetisation process, ATMs, narendra modi, indian express, india news The accounts of cooperative banks are with commercial banks.

THE CENTRE’S demonetisation move has resulted in an unprecedented crisis for Maharashtra’s 508 cooperative banks, which are accusing the Reserve Bank of India (RBI) and other commercial banks of not meeting their demands for cash.

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With a customer base of more than 2.5 crore, urban cooperative banks (UCB) are popular in Maharashtra, especially among the lower and middle classes. Given their ease of doing business, many small traders such as vegetable vendors and autorickshaw drivers have accounts with these banks. Barring a few, most UCBs do not have their own currency chest, and rely on commercial banks.

Post-demonetisation, Vidyadhar Anaskar, chairman of Vidya Sahakari (Cooperative) Bank, said commercial banks have failed to adhere to RBI guidelines on cash dispensation. “Banks told us that since we are customers of the banks we are entitled withdrawal of only Rs 10,000 per month,” he said.

Anaskar, also president of Maharashtra Urban Cooperative Bank’s Federation, had taken up the matter with RBI. “Senior RBI officials had spoken to commercial banks but they (banks) insist on a written order from the apex bank,” he said. “Meanwhile we are left to fend for ourselves.”

Anaskar’s bank does business of more than Rs 500 crore, and has so far “managed to recycle some currency notes, but we are waiting for more from commercial banks”.

Arvind Khalatkar, chairman of Janata Sahakari Bank, said they distributed Rs 4-5 crore in the last few days but have run out of cash. “The worrisome trend is that RBI officials have stopped taking our calls. We have to face the ire of customers,” he said.

The 65-year-old bank has over 70 ATMs – all of them closed due to want of cash.

Cosmos Cooperative Bank is a rare cooperative bank that has a currency chest of its own, with which it has till now met the demand. Mukund Abhyankar, group chairman, however said, “We distributed around Rs 90 crore and now require cash.”