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The Supreme Court may have given permission to district central cooperative banks (DCCBs) to accept deposits made in withdrawn notes, but operational difficulties have put speed-breakers in the process. As they face mounting losses, some of the DCCBs in Maharashtra are now thinking of either seeking legal recourse or organising a massive agitation to draw attention to their problems.
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Between November 10 and 14, Rs 4,700 crore was deposited with the 31 DCCBs in Maharashtra in withdrawn or specified bank notes (SBNs). Through a series of circulars, the Reserve Bank of India (RBI) not only barred the DCCBs from accepting more such deposits, but also barred them from getting old notes exchanged.
The apex court, after hearing a plea on the matter, has allowed the DCCBs to remit old notes for new ones, provided that the depositors’ accounts are 100 per cent KYC-verified. Other than individual account holders, the Supreme Court had also directed that accounts of Primary Agricultural Credit Societies (PACS) should be thoroughly vetted.
While the apex court has laid down the basic guidelines, the working framework is yet to fall into place.
A few days before the Supreme Court’s ruling on the subject, the RBI had asked NABARD to check the deposits in DCCBs.
Some DCCBs, including the one in Pune, have written to NABARD, asking it to verify the KYC norms of depositors, so that they can start the work of remittance.
However, till date, neither the RBI nor NABARD have issued a clarification on how the process will be carried out.
The 31 DCCBs in Maharashtra have 3,600 branches, of which 2,900 branches are located in rural areas. NABARD, the supervisory body of these banks, carries out sample checks on the branches and accounts in these banks.
Checking whether the depositors’ accounts are 100 per cent KYC-compliant can be quite a challenge, given the manpower needed to carry out such checks.
But as the process of remittance keeps on getting delayed, operational losses are piling up for the DCCBs.
Ramesh Thorat, chairman of the Pune DCCB, said that every day, the bank is incurring losses of almost Rs 10 lakh, due to refusal by the authorities to start the process.
“We were audited by NABARD twice, yet the process refuses to start. The central government is not clear on the process and we have to bear the losses,” he said, adding that the Pune DCCB has seen deposits to the tune of Rs 600 crore. The losses are a result of loss of business as well as security charges to guard the money.
On Thursday, the Pune DCCB has called a board meeting to discuss its future course of action. “We will decide on whether to file an original writ petition in the matter or to take to the streets,” said Thorat.
Suresh Birajdar, chairman of the Osmanabad DCCB, said the bank has called a meeting on Friday to discuss the matter.