Hindu Vivek Kendra
A RESOURCE CENTER FOR THE PROMOTION OF HINDUTVA
   
 
 
«« Back
 

Rs 5,000 crore put into Maharashtra cooperative banks in just 4 days

Author: Bhavika Jain,TNN
Publication: The Times of India
Date: December 15, 2016
URL:   http://timesofindia.indiatimes.com/city/mumbai/5000-cr-put-into-maha-co-op-banks-in-just-4-days/articleshow/55989956.cms

District credit cooperative (DCC) banks in Maharashtra received Rs 5,000 crore in old notes of Rs 500 and Rs 1,000 denomination in just four days, from November 10 to 14, when they were allowed to accept demonetised currency.

As most accounts in these banks are held by farmers, Nabard (National Bank for Agriculture and Rural Development), the apex bank for all these institutions, has now begun scrutiny of the accounts to check for any cases of "suspicious deposits" or financial mismanagement.

Officials say there have been complaints that some accounts have been used to deposit unaccounted cash. Most of the 31 DCC banks in the state are controlled by local politicians and have been hauled up for financial mismanagement in the past. RBI had allowed DCC banks in the state to deposit demonetised notes for only four days in November, during which period their 3,800-plus branches received the huge deposits.

The RBI, though, has neither allowed exchange of banknotes nor any more deposits after that; it has only permitted cash withdrawals of up to Rs 24,000 a week.

"While initially only accounts with more than Rs 2 lakh deposits will be scrutinised, other accounts will come under the scanner too," said a senior official of the state cooperation department.

Nabard officials said the average balance in many of the accounts and past transaction history cannot explain the sudden deposits. Even if the account holder has deposited just Rs 1 lakh, if the past transactions and balance history is in a few thousands, how can the deposit be explained?" asked an official.

He said branches of Sangli DCC bank in Islampur, Shirala and Tasgaon were scrutinised last week. The Sangli DCC bank had collected approximately Rs 320 crore in old notes.The Pune DCC bank received cash deposits of Rs 600 crore.

Officials pointed out that the cash crunch post-demonetisation has seen the weekly withdrawal limit of Rs 24,000 not being met with at most branches. This has led to a huge cascading effect on the rural economy . DCC banks have a wide network and heavy presen ce in rural areas; they have close to 85-90 lakh accounts. A DCC bank is also a key institution in that it disburses farm loans. Considering their reach and cash-rich status, politicians have always vied for cont rol of these banks; most DCC banks in Maharashtra are controlled by NCP and Congress politicians. And instances of fiscal mismanagement have been so frequent that the banks have often been referred to as "piggy banks" of netas.

Despite all this, the clamour for allowing DCC banks to transact is growing, with the argument being put forth that farmers are suffering. Recently, CM Devendra Fadnavis along with politicians who run these banks met finance minister Arun Jaitley demanding that DCC banks be allowed to carry out transactions.

DCC banks have been saddled with old notes totalling Rs 5,000 crore. We have demanded that the RBI take the money from us because we have to pay interest to depositors, which works out to Rs 55 lakh a day across these banks. There is no reason why RBI should impose restrictions on us. There are only a few accounts with more than Rs 2 lakh deposits," said a senior politician who is also director of a DCC bank.
 
«« Back
 
 
 
  Search Articles
 
  Special Annoucements