Allow co-operative banks to deal with demonetised currency: Bank staff to govt

District central co-operative banks are dealing with over Rs 6 lakh crore towards working capital in the country

Supporting the demand of the co-operative bank employees' organisations, the commercial bank employees' organisations has sought help from the government in revising the Reserve Bank of India's (RBI's) instructions allowing credit organisations to deal with the Rs 500 and Rs 1000 currency notes.

In a joint letter written to the Union Finance Minister Arun Jaitley, the All India Bank Employees' Association (AIBEA) and All India Bank Officers' Association (AIBOA) said that the district central co-operative banks, which are the backbone of the industry, are dealing with over Rs 6 lakh crore towards working capital and deposits of around Rs 3 lakh crore. These banks own funds worth more than Rs 2 lakh crore.

 

The banking sector is going through a turmoil and the employees are working under stress as customers are thronging bank branches to deposit or exchange withdrawn currency notes.

However, according to RBI instructions, district central co-operative banks, industrial co-operative banks and primary co-operative banks cannot carry out transactions either for their own customers or for the general public.

"Similarly there are more than 10,000 primary agricultural cooperative credit societies, out of which 65 per cent are doing banking business. All primary cooperative agriculture and rural development banks have also been permitted to carry out banking activities," said the letter.

While primary level credit institutions have been serving several crores of farmers in the country, "they have been relegated to the background and are treated in the most cavalier fashion, as if they are worthless organisations," alleged the organisations. 

These base level organisations deal with a majority of the banking masses in villages and all these co-operative credit organisations, apart from conducting banking transactions, are the prime source of distribution of essential commodities.

Considering this, the organisations requested the Minister to advise the RBI to issue revised instructions enabling credit organisations to continue their operations to serve "the lesser privileged sections of the society," they added.