Old currency lying in coop banks, allow deposits: Pawar

Tribune News Service

New Delhi, March 29

Stacks of junked Rs 500 and Rs 1,000 notes are lying in district central cooperative banks as these were not allowed to be deposited with currency chests. This has been affecting crop loan disbursal, NCP leader Sharad Pawar told the Rajya Sabha during Zero Hour today.

According to Pawar, the district central cooperative banks (DCCBs) were saddled with large sums of junked currency after the RBI midway withdrew permission to them to accept the demonetised currency. The deposits they received before the withdrawal of permission were now lying with them, he said.

Following the withdrawal of old Rs 500 and Rs 1,000 notes from circulation on November 8, 2016, the junked currency was allowed to be deposited or exchanged in banks. The DCCBs accepted and exchanged demonetised currency between November 10 and 13, 2016, but they were subsequently barred from doing so, leaving them with stacks of junked currency, Pawar said.

According to him, 371 DCCBs received deposits worth Rs 44,000 crore, including Rs 4,600 crore in 31 such banks in Maharashtra. After the permission to receive old notes was withdrawn, these banks could not deposit the junked currency they had in the treasury, he said, adding that such banks, as on November 17, 2016, had about Rs 8,000 crore in old notes. The DCCBs in Maharashtra alone had Rs 2,772 crore.

He said these banks were bound to pay interest on these deposits, but that currency could not be considered part of cash balance for determining the cash reserve ratio, thereby affecting their financial health.

“This has had great impact on rabi season disbursement of crop loans,” Pawar said, adding only 33 per cent loan has been disbursed. “Farmers are not getting crop loans,” he said. Money was lying in the chests of DCCBs, but it could not be disbursed, he said.

He said he had written to the Prime Minister and the Finance Minister that the old notes lying with DCCBs be allowed to be deposited in currency chests. Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi said the concerns raised would be communicated to Finance Minister Arun Jaitley.