Kerala CM, ministers to sit in Satyagraha at RBI regional office

The state government alleges that the RBI's restrictions on primary-coperative banks would put the State into trouble

The Chief Minister of Kerala Pinarayi Vijayan and the ministers of the State has decided to sit in Satyagraha in front of the Reserve Bank of India (RBI) regional office, Thiruvananthapuram for seven hours on Friday, against the central bank's decision not to allow primary co-operative banks to deal with the demented 500 and 1000 Rupee notes and exchange.

In the official Facebook page, Chief Minister's Office, Kerala, the government has said that the Chief Minister and Ministers will sit in Satyagraha from 10 am to 5 pm on Friday.

"Kerala's co-operative sector is not an abode of black money. Destroying our co-operative sector means the complete destruction of Kerala's economy. Public sentiment is to strongly resist any efforts made at crushing our co-operative sector. This sentiment needs to be expressed," said the social media page.

Later, the Chief Minister added that the money in the co-operative banks in the State is the hard earned money of the citizen in the country and these banks play a vital role in the State's economy.

The RBI has restricted the smaller co-operative banks to exchange the old notes which have been withdrawn from the market with the new notes and to accept deposits in the demonetised 500 and 1000 rupee notes. The cap for these banks to withdraw funds from other banks has been kept at Rs 24,000, which is equivalent to the cap fixed for every individual, said the government.

Vijayan alleged that while he, along with State Finance Minister visited Union Finance Minister Arun Jaitely to express the issues in the State and they received a good response from the Union Minister, the RBI soon came out with its view that it cannot allow co-operative banks under the purview of banks.

"We suspect there is a political conspiracy in this. The BJP leaders including those from the State are alleging that the co-operative banks in Kerala are hubs of black money. It is a ridiculous argument," he added. He also alleged that the scarcity of notes will adversely affect the pilgrims to Sabaramila during the current season.

Detailing on the government's stand on this, Kerala Finance Minister T M Thomas Isaac in his Facebook account, said that the primary co-operative societies are at a standstill now and when the regulations return to normalcy, there will be chaos from the customers to withdraw money from these societies, leading things to collapse of the system.

While there are around 6213 bank branches in the State, the district primary co-operative societies have around 4,800 branches and RBI is not utilising these banks to address the crisis.

The primary Co-operative banks in the State has around Rs 80,000 crore investment in the State and out of this around Rs 2,400 crore is kept as cash while the amount of lending is deposited in district co-operative banks and other commercial banks. With the limit for withdrawal fixed at Rs 24,000, the only option for the customers is to transfer the amount from these co-operative banks to other commercial banks and this would end the primary co-operative banks future in the State, he alleged.

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