While the DCCBs ceased receiving demonetised notes, they found themselves stuck with demonetised currency which the central bank had refused to exchange. District central cooperative banks have also been permitted to exchange these banned notes with the RBI by July 20, provided they collected the demonetised notes between November 10 and 14 past year, according to a notification by the finance ministry.
Mumbai: The Union government on Wednesday has given a big relief to district central cooperative (DCC) banks across the country by instructing the Reserve Bank of India (RBI) to accept and exchange demonetised Rs 500 and Rs 1,000 notes lying idle since the end of a year ago. The latest move to allow them to deposit the junked currency brings those concerns back to the fore.
However, neither the government nor the RBI has till now announced the amount of demonetised currency that was deposited post demonetisation.
After demonetization of high currency notes, the finance ministry has asked banks, post offices to submit the junked notes by July 20. He also promised financially weak DCCBs assistance from the Maharashtra State Co-operative Bank, the apex district cooperative bank.
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Initial estimates say that around Rs 5,771 crore are lying with 32 coop banks in Maharashtra.
Kerala Finance Minister Thomas Isaac had even said that cooperative banks in the state have Rs 90,000 crore in deposits and Rs 75,000 crore in credits. The concern was that these banks, being politically connected, might be used for laundering black money.
Banks and post offices will, however, have to give reasons for not depositing the withdrawn notes within the specified time period "subject to the satisfaction of the RBI", the ministry said. However, in case of NRIs living overseas, the RBI revealed that they would be given time till June 30, 2017 to exchange notes up to Rs 25,000.
Of these banks, the Pune District Cooperative Bank was the worst-hit holding in old notes Rs 811 crore, followed by Satara DCB at Rs 399 crore, Nashik DCB Rs 376 crore, Chandrapur DCB with Rs 356 crore and several others with more than Rs 100 crore-plus, said the official.