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Demonetisation: Cash-strapped co op societies to challenge RBI circular in HC

Demonetisation: Cash-strapped co op societies to challenge RBI circular in HC


Mangalore Today News Network

Managluru, Dec 13, 2016 : Cash-strapped Cooperative Societies in Undivided Dakshina Kannada district are all set to challenge the RBI circular dated November 14 that fixed a withdrawal cap of Rs 50,000 per week for their branches.


Cash-strapped Cooperative Societies in Undivided Dakshina Kannada district are all set to challenge the RBI circular dated November 14 that fixed a withdrawal cap of Rs 50,000 per week for their branches.A decision to take up legal battle in the high court against RBI cap was taken at a meeting of presidents and CEOs of primary agricultural cooperative societies in Udupi and Dakshina Kannada district convened by South Canara District Central Cooperative Bank chairman M N Rajendra Kumar on Tuesday.


Rajendra Kumar said preparations will be made to file petition in the Karnataka high court immediately. "Primary Agricultural Cooperative Societies are registered under Karnataka Cooperative Societies Rules 1959. All transactions of such societies are done as per rules with proper auditing. However, the recent circular of the RBI soon after demonetisation of Rs 500 and Rs 1,000 notes and the circular that followed have put them in a precarious situation. People in rural areas approach to exchange currencies, but cooperative societies are not able to transact because of the restricted money flow," he said adding that cooperative societies are currently meeting just 1% of the money requirement.


He said primary agricultural cooperative societies in Undivided Dakshina Kannada district have over 4,000 members. However, RBI has ignored cooperative societies through demonetisation. "We will seek directions from the high court to accord institutional status of primary agricultural cooperative societies and quash the withdrawal cap. By fixing a withdrawal cap of Rs 50,000, RBI has considered cooperative societies as individuals. Since the transactions of cooperative societies are limited through RBI circular, farmers are not able to repay their loans too. Hence, we have demanded the state government to extend loan repayment due dates of agriculture loans till all issues related to demonetisation are solved," Rajendra Kumar said.


He pointed out that farmers are not able to avail the government subsidy benefits when they fail to repay loan on time. Majority of the people in rural areas do not have savings accounts in national banks. Since all their transactions are through cooperative banks, they find it difficult to withdraw money for their day to day expenses too.


Courtesy: TOI


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