As District Central Cooperative Banks (DCCB)s across the country continue to grapple with large deposit of withdrawn currency notes, S S Mundra, deputy governor of the Reserve Bank of India (RBI), expressed confidence that the matter would be resolved before the disbursal of the upcoming kharif season. Mundra, who was speaking to the media at the sidelines of the 13th convocation of National Institute of Bank Management (NIBM), said NABARD was looking into the matter.
Known for the their deep rural penetration, DCCBs had faced severe restrictions from the RBI. Not only were they barred from exchanging old currency notes, but the old currency notes deposited in the first two days post demonetisation were denied exchange at other currency chest banks. The 34 DCCBs in Maharashtra had seen deposits of over Rs 8,000 crore of which Rs 2,000 crore still remains with the banks in withdrawn notes. The DCCBs have claimed that the refusal of the RBI to get these notes exchanged has financially weakened them. For the upcoming kharif season, 11 DCCBs in Maharashtra might not be in a position to disburse the loan amount given to them.
Mundra said the topic of remonetisation of the DCCBs was an old matter and the issue about old currency notes remained under the supervision of NABARD, who was looking into the matter. Following instructions of the RBI, Nabard had conducted KYC verification of the individual accounts in which deposits were made. Asked if NABARD would be able to finish the ongoing work before the disbursal of the kharif loan, he expressed positively. “NABARD is sensitive enough about the matter,” he said. DCCBs’ share in disbursal of crop loan was less as they mainly cater to small and marginal farmers.
Asked about the sudden cash crunch in various parts of the country, Mundra said it was just a temporary phenomenon. “Around 85 per cent of the ATMs in the country are working properly and there is no problem. The intermittent problem had come was transient due to issues like financial year closing, etc,” he said.
Mundra said the work for calculating the old currency notes that have come back into the system was still going on and the RBI would release the figures after completion.