Source: News Bharati English18 Nov 2016 18:27:11
Mumbai, Nov 18: The 1500-odd Urban cooperative banks have been at the receiving end of the demonetization scheme following inadequate remittances from the Central Bank.
While the apex bank has been making all efforts to provide liquidity for the nationalised and private sector banks, the common man’s cooperative banking sector has been ignored with close to 52 cooperative banks being left out with empty hands over the past two days.
In a letter addressed to the deputy governor of RBI, R. Gandhi, The Maharashtra State Cooperative Banks’ Federation Ltd said, “After the announcement of the scheme of withdrawal of legal tender character of existing 500/- and 1000/- currency notes, commercial banks refused to provide currency support to our UCBs on November 10, 2016, treating us as ‘general customers’.
Later, in spite of issuance of circular by the RBI that the limit of 10000/- is applicable to general customers and not applicable to cash withdrawal from a bank account by one bank from another bank, these public sector banks, especially State Bank of India, Bank of India refused to adhere to the request of UCBs.”
While RBI did offer some remittances in the first few days, the approach in the past two days was far from encouraging for the fraternity, who has been fighting shoulder to shoulder with other bankers to make the national cause of demonetization a great success.
The 1579 cooperative banks across has over 10,000 branches and close to 3,000 operative ATMs across the country and constitute close to 4% market share in the banking business mix of the country.
UCBs have to depend on the local currency chests of public/private sector banks to withdraw/deposit the currency, while many others have a partnership of payment systems with the NPCI. Most of these UCBs are direct members of the RBI for CTS and therefore expect good co-operation from the SBI as well as from the other public/private sector banks.
While there are huge queues lined up with public and private sector banks, the cooperative banks have been left out for want of legal tender adding to the chaos.
Meanwhile, the Pune District Urban Coop Banks’ Association has moved the High Court challenging the RBI decision against supply of cash to UCBs.