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Business News/ Politics / Policy/  Demonetisation impacts cooperative banks in Kerala; CM Vijayan, ministers protest
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Demonetisation impacts cooperative banks in Kerala; CM Vijayan, ministers protest

The cooperative banks in Kerala have virtually come to a standstill as they cannot exchange old currency notes or issue fresh ones to the customers

Kerala chief minister Pinarayi Vijayan alleges that the current developments are part of a conspiracy hatched by the BJP to destroy the cooperative sector in the state. Photo: MintPremium
Kerala chief minister Pinarayi Vijayan alleges that the current developments are part of a conspiracy hatched by the BJP to destroy the cooperative sector in the state. Photo: Mint

Bengaluru: Kerala chief minister Pinarayi Vijayan led hundreds to the streets, launching a day-long mass agitation, on Friday to protest against cooperative banks not being allowed to exchange scrapped Rs500 and Rs1,000 currency notes.

The cooperative bank sector in Kerala, like most other states in India, has virtually come to a standstill as these banks cannot exchange old notes or issue fresh notes to the customers.

The move has hit several people, including farmers, housewives and retired government officers, who depend entirely on cooperative banks. For instance, as per Kerala government estimates, 70% of the agricultural credit in the state is routed through the four-layered structure of the cooperative bank structure.

The entire state cabinet, along with hundreds of other supporters, spilled on to the streets before a regional office of the Reserve Bank of India (RBI), as part of the protest. The leader of the ruling party in the alliance, Communist Party of India (Marxist) or CPM’s general secretary Sitaram Yechury, also made a surprise visit.

In a rare display of unity, leaders of the opposition, Congress-led United Democratic Front (UDF), supported the protest. With the ruling communist parties and the UDF opposing the RBI and the central government’s stand on cooperative banks, the Bharatiya Janata Party finds itself alone in the state.

“Cooperative banks together have an estimated deposit base of Rs1.27 lakh crore. This will not surprise anyone who knows the state and the importance of the cooperative sector here. Those who had no role in Kerala’s development so far naturally will not understand these problems," the chief minister said, hitting out at the BJP, in his televised speech inaugurating the protest.

The huge deposit base should be seen as a mark of accessibility and trust of ordinary people in cooperative banks, he said. “Every family in Kerala is connected to a cooperative bank in their region. These days, if a child is born in a family, the first thing the family does is to open an account in his name in the local cooperative bank."

Meanwhile, Kerala finance minister Thomas Isaac tweeted, “To confiscate black money, use the enforcement agencies. Why liquidate the cooperatives?"

Vijayan also reiterated his allegation that the current developments are part of a conspiracy hatched by the local unit of the BJP to destroy the cooperative sector, acting in tandem with them the Centre and that the RBI had shown prejudice.

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Published: 18 Nov 2016, 02:20 PM IST
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