With the Reserve Bank of India refusing to accept Rs 342 crore in demonetised notes of Rs 500 and Rs 1,000, the chairman of Nashik District Central Cooperative Bank, Narendra Darade, has threatened to resign from his post. “We are facing enormous problems in the functioning of the bank. We are stuck with Rs 342 crore in demonetised notes that are not being accepted by the RBI. We, however, have to pay interest to our account holders. Moreover, because of reports of a possible loan waiver for farmers, many who have taken loans are not paying instalments, which is creating financial problems for us. I will resign from my position if some resolution is not found on this issue,” Darade said.
Four days after Rs 500 and Rs 1,000 notes were discontinued, the RBI had imposed sanctions on district cooperative banks to prevent any attempt at laundering money through these banks.
District cooperative banks are central to Maharashtra’s rural economy, providing credit to farmers and the cooperative sector. The NDCC Bank has a deposit base of around Rs 3,500 crore.
“We are sitting on Rs 342 crore of useless notes on which we are paying interest to the depositors. We have corresponded with the authorities so many times but failed to get any answer. A resolution needs to be found as early as possible,” Darade said.
The bank had, during the last financial year, distributed around Rs 1,750 crore in agricultural loans. “Due to the buzz that there could be a loan waiver, people have stopped paying instalments. So far, we have sent notices to nearly 70,000 defaulters,” Darade said.
This is not the first time that members of the NDCC Bank have taken on the government over the issue. A few months ago, a protest had been organised by the bank alleging the state’s failure to resolve issues raised by district cooperative banks.