Bengaluru: Co-operative bank curbs stump farmers

Bengaluru: All business transactions at the 21 district credit co-operative banks and 5,000 primary agriculture credit co-operative banks have come to a standstill since November 14 due to demonetisation.

The worst affected are poor farmers, who have not been able repay their crop loan or withdraw money from their banks over the last week. Also, milk co-operative unions have not been able to dispense the incentive  of '4 per litre to milk suppliers following the imposition of RBI restrictions on the daily transactions of co-operative institutions.

“All our co-operative banks have remained closed since November 14. The RBI has not allowed our DCC banks to exchange the old '500 and '1,000 notes like the nationalised banks.  Are all our co-operative institutions supposed to remain closed till the demonetisation process ends on December 30? " asked Co-operation and Sugar Minister, H S Mahadeva Prasad, when contacted.

He deplored that  fresh disbursal of crop loan, acceptance of fresh deposits, payment of matured deposits, issue of loans against jewellery and other activities had come to a standstill at the DCC banks since Prime Minister Narendra Modi pulled back the Rs 500 and Rs 1,000 denomination notes from circulation on November 8.

Pointing out that farmers, who had taken short term crop loans, had to repay them within 365 days to become eligible for  the zero interest scheme and  for a fresh loan, he said many were now not only forced to become defaulters, but also pay interest for no fault of theirs.

“Lakhs of  farmers in the state are waiting anxiously for the banks to open so they can repay their loans. The co-operative banks are a lifeline of the people in rural areas and in their absence the villagers are badly affected,” the minister said.

Although the DCC bank in Dakshina Kannada district had '2,500 crore deposits and the primary agriculture credit co-operative banks had over '3,500 crore in deposits,  both had not been able to dispense cash to their customers owing to the Reserve Bank of India’s restrictions,he added.

“ The DCC banks need to be given permission to transact business in the interest of farmers,” Mr Mahadeva Prasad emphasised, adding that Chief Minister Siddaramaiah had written to Union Finance Minister, Arun Jaitley to allow the co-operative banks to function on par with other banks for the sake of  the state’s farmers.