Demonetization: Credit co-ops’ struggle is still on

Today is the first anniversary of demonetization. The co-operative sector hit worst by the decision is still trying to recover from the shock.

Besides the genuine concerns of the sector, efforts by corrupt politicians trying to use the channel of co-op banks to exchange their black money also made headlines for months together. The DCCBs, which are mostly controlled by the ruling parties across states, were much in news.

The states of Kerala, West Bengal and Uttar Pradesh topped the chart as ED and IT sleuths brought them under their scanner.

Media reports said banned notes worth Rs 57, 49, 500 were deposited into various accounts between November 8 and November 15, 2016 in six cooperative banks in Kerala even as Kerala’s UDF MPs and MLAs rushed to Delhi to discuss the issue of demonetization and the crisis faced by cooperative banks.

Unusual amounts of unexplained currency were also deposited in cooperative banks across districts in West Bengal, reported media. The amount ran into several thousand crores. The banks that carried out irregular transactions included Raiganj cooperative bank, Hooghly district cooperative bank, Midnapore Vidyasagar cooperative Bank, and banks of Malda and East Midnapore jointly.

Till November 13 about Rs 1,000 crore were deposited in 300 branches of 17 central cooperative banks. Most of the cash in these banks came in from 5,000 primary cooperative societies.

But credit co-ops which were doing business honestly were also worst hit. The CEO of the largest credit co-operative in the country Buldana Urban has made an earnest request to Prime Minister Natrendra Modi to help arrest the plummeting confidence of people in the fifty thousand credit co-operatives active in the country.

In the wake of demonetization an impression is being created that all the credit cooperatives are thieves and this has led to erosion of faith among the members in these cooperative institutions, says Sukesh Zamwar, CEO of Maharashtra headquartered Buldana Urban which employs approximately 5500 workers and boasts a business mix of 1.3 billion USD.

And with credit co-ops more than 8 to 10 crore people linked to them also suffered one way or the other. Sufferers also included about one crore people who are employed in the sector spread across the country.


Share This: