Allow co-op banks to exchange notes: Badal to Jaitley

Punjab Chief Minister Parkash Singh Badal today urged Union Minister Arun Jaitley to direct the RBI to allow the District Central Cooperative Banks to participate in demonetisation scheme implementation.
In a letter to Jaitley, he solicited the Union Finance Minister's attention towards a RBI circular stating that DCCBs are not allowed to accept specified bank notes as deposits and also not authorised to exchange the demonetised notes.
Badal said in view of non-repayment of agriculture loans due to non-acceptance of demonetised banknotes by DCCBs, farmers are unable to avail the agri-credit needed for sowing Rabi crop. On the other hand, the decision brought the business of cooperative banks to a standstill.

He said several DCCB branches are operational in areas where there is no presence of other public or private sector banks and asked Jaitley to advice the RBI to allow DCCBs to be a part of the demonetisation scheme to give relief to the farmers other people in exchanging old higher-value notes.
The Chief Minister said acceptance of deposits/repayment of loans shall be strictly based on the instructions issued earlier.
Badal also said the RBI notification which instructs withdrawal of legal tender character of old Rs 500 and Rs 1000 banknotes was followed by a corrigendum which clarifies that 'banks' as defined under Banking Regulation Act, 1949 shall implement the demonetisation scheme.

In view of these instructions, DCCBs are licensed by the RBI and are part of the banking industry, hence these banks accepted Standardised Bank Notes (SBNs) of Rs 500 and Rs 1000 denominations from 10th to 13th November, he said.