Mumbai: Terming the Reserve Bank of India’s (RBI) move to restrict district central co-operative banks (DCCBs) from exchanging or depositing old currency notes of Rs500 and Rs1,000 as valid, a minister in Maharashtra government has said these banks have lost credibility due to alleged mismanagement of funds.
“The district central co-operative banks have faced several allegations of corruption in last one decade and investigation in many cases is going on,” minister of state for agriculture and marketing Sadabhau Khot said.
“If DCCBs are given permission to exchange scrapped notes, some people would have certainly used it for converting their black money into white, hence the restriction over DCCBs is valid,” he told reporters in Pune on Thursday.
The RBI had last month issued a circular restricting the DCCBs from exchanging or depositing old currency notes of Rs500 and Rs1,000 which were declared as illegal tender under the government’s demonetisation move on 8 November.
Khot said there are some DCCBs that are functioning well under an administrative officer rather than its elected board of directors but there are some DCCBs that have incurred heavy losses due to mismanagement of funds and such debt-ridden banks have turned defunct. Their past performance is self-explanatory to be put under restrictions, he added.
On the Rs24,000 cash withdrawal limit over the bank counters, Khot said there are very few farmers who need so much amount in cash. Farmers’ cash requirement is not so high, hence they would not complain over such issues, he said.
The marketing department of the state government has already issued instructions to the agriculture produce market committees (APMCs) to issue cheques to farmers for purchase of the produce.
“The seeds required for Rabi season are already disbursed in the market and all the distributors are asked to make the transactions through cheques. The farmers who have received amount in cash from selling their produce, are depositing it in their accounts with public sector banks. It means the things are moving at grassroots,” Khot said.
On financial allocation of Rs21,000 crore by NABARD for farmers, the minister said, “The credit requirement for Rabi season is mostly going to be met through the allocation from NABARD. There will be some efforts from the state as well if more credit supply is required.”
“The Central government has given Rs75 crore for onion storage centres, but the state has sought additional credit supply of Rs50 crore because Maharashtra is the largest onion producer in the country,” Khot said during a meet organised by Pune Union of Working Journalists.