Gujarat co-op banks go dry, farmers fume

Manas Dasgupta in Ahmedabad

Gujarat farmers are keeping their fingers crossed. After 20 days of “no banking” since district central co-operative banks were barred from transacting any business, they still don’t know when the central government-promised loan from NABARD will trickle down. Their rabi crop sowing is already delayed by about a fortnight. “When will the crops be sown and how will the farmers and their cattle survive all these days,” asks Gujarat Khedut Samaj secretary Sagar Rabari. 

Gujarat’s farming community is probably the worst hit because the state has a strong network of co-operatives. These banks play a very important role in rural areas where over half of the farmers are account holders in co-operative banks. 

About 15-20% farmers in the state still do not have any bank account and deal only in cash. They will have to wait till the cash reaches the near pre-demonetization level.

Senior BJP leaders, including the one-time close aide of PM Modi and the chairman of the National Federation of State Co-operative Banks Dillip Sanghani has already expressed his anger. And so has Gujarat chief minister Vijay Rupani. Yet the Reserve Bank of India has refused to reverse its order banning these banks from either exchanging or depositing now-defunct notes. The account holders are allowed to withdraw from their accounts but that is only in name, no cash has reached the rural co-operative banks since the demonetization. Last week Sanghani met Modi in Delhi informing him about the farmers’ woes. And Rupani personally took up the matter with finance minister Arun Jaitley and the RBI governor Urjit Patel, but nothing has happened. 

“The farmers could not clear the old loan as they have mostly the defunct notes,” the manager of a co-operative bank pointed out. They are in a fix over meeting their daily household expenses, including arranging fodder for their cattle. “We also do not know when the money sanctioned by NABARD will reach the villages,” said a bank manager.