The District Central Cooperative (DCC) Banks in Maharashtra are in a difficult situation, after the Reserve Bank of India decided not to accept the Rs 500 and Rs 1,000 notes deposited with them, following the Centre’s announcement about demonetising such notes. The 31 DCC banks in Maharashtra had collected almost Rs 3,000 crore in cash in the first three days after the demonetisation announcement was made.
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After the announcement, DCC banks had seen people exchanging cash as well as depositing their money in the banks. However the RBI subsequently debarred the DCC banks from accepting withdrawn notes. Pramod Karnad, managing director of the Maharashtra State Cooperative Bank (MSC) Bank — the apex bank among DCCs — said the banks are now stuck with the Rs 3,000 crore collected from the people.
After the RBI’s directive, banking operations in DCC banks across the state have come to a virtual halt. Compared to commercial banks, DCC banks have better outreach, especially in rural areas. According to figures, as against 2,971 rural branches of DCC, commercial banks have only 2,938 such branches. In many remote areas, DCCs are the only access local residents have to the organised banking sector.
Dilip Mohite, director of Pune DCC, said the bank had collected Rs 650 crore in the first three days, but commercial banks have refused to accept the money. “Not only are we saddled with the cash, but we had to stop our customers from withdrawing money from their bank accounts,” he said.
Due to the sudden cash crunch, most of the 270-odd branches of the DCC have suspended operations. Mohite said that though PDCC officials had taken up the matter with the RBI, no conclusion has been reached.
A similar situation was seen at the Osmanabad DCC, where Rs 1 crore was collected in 98 branches. Suresh Birajdar, DCC chairman, said that in many parts of the district, it was the only bank available to customers.
“The RBI seems to suggest that rural people should travel to the urban centres and wait in long queues to get their currency changed,” he said.