Despite being flush with funds, Shri Mahila Sewa Sahakari Bank Ltd that sprung out of the unique ‘SEWA model’ and provides banking services to around 7 lakh women, mostly involved in informal sector, is struggling to pay its members due to cash crunch. Its officials said that the bank is currently operating on a cash reserve of nearly Rs 10 crore across 13 branches, and it may have to stop withdrawals by its members if the situation does not improve.
The SEWA bank, considered precursor to Bharatiya Mahila Bank (BMB), is unable to provide exchange of banned currency notes to customers owing to limited liquidity. Bank officials averred that SEWA bank has a cash reserve of around Rs 50 crore in GSC Bank in a current account and a Rs 50 crore reserve in accounts with HDFC Bank.
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“Other banks should lend us cash, only then we will be able to give it our bank customers — all of whom are women. How can we make payments to our members when none is forthcoming? As an urban cooperative bank, we can exchange old currency notes, but we are unable to do so because we are not getting payments from other banks. From small withdrawals of up to Rs 4000 last week, today we are allowing up to Rs 10,000 to SEWA members. We already borrowed Rs 1.20 crore from Gujarat State Co-Op. Bank Ltd.(GSC) and Rs 50 lakh from HDFC Bank with whom our mandated currency chest is linked. We are operating on a Rs 7-10 crore of cash reserve, but will need more liquidity. We are also sending mobile vans for collection and withdrawals. We have a huge deposit of close to Rs 50-60 lakh of old currency that we received from our members,” said Vandana Shah, general manager at Mahila Sewa Sahakari Bank’s head office in Ahmedabad.
The 42-year-old bank, which caters to SEWA members who are mostly poor and marginalised women, operates through its 100-odd Bank Sathis and “handholders” through 13 branches — nine in Ahmedabad and one each in Gandhinagar, Nadiad, Mehsana, Himmatnagar and Vadodara.
SEWA leader and vegetable vendor Kantaben Parmar (38) had to trim the size of her business post the currency ban. Waiting to borrow Rs 6,000 for her business needs at the SEWA bank’s head office in Ellisbridge area, she said, “Earlier, I used to buy vegetables worth Rs 5,000- Rs10,000 daily for my business, but now I buy vegetables worth only Rs 2,000-Rs 3000. The business in dull. I help more than 1,000 women vegetable vendors in Danapith area in their banking needs. Most of the women are poor and have very meagre savings, but two women have deposited Rs 1.5 lakh each into their accounts.”
In contrast, 60-year-old Gangaben Patani, who is on the Board of Directors of the SEWA bank and among the founding leaders of SEWA, gave a thumbs up for the demonetisation move by the government.”I deal and help 5,000-7000 SEWA members and women in their banking needs. Despite facing issues with the currency ban, most feel that this will weed out the exploitation that we face in the financial system due to black money. Having joined formal banking via SEWA, my savings have reached a point where I will be building four houses for my children now. “
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