In the wake of demonetization of higher currencies by the govt majority of Urban Cooperative Banks and almost all the credit co-operatives in the country have simply ceased to exist as far as servicing their members is concerned.
These co-op organizations mostly keep their deposits with commercial banks which treat each credit co-op as an individual which can withdraw Rs 10,000 per day and Rs 20,000 per week following the RBI guidelines. Some of the credit co-ops especially the multi state credit co-op societies among them have become huge entities servicing sometimes a twenty thousand strong clientele.
Majority of their managers are camping in Delhi trying to convince the Central Registrar to talk to the apex bank on their behalf and help them out of the tough situation.
CGM of Hyderabad based Citizen Co-op Societies PV Subbaiah Choudary told Indian Cooperative “today we boast of a turnover of Rs 1600 crores with 41 branches. We have to offer close to Rs 10 crore to our members and what the Bank is giving us is Rs 10,000, he said underlining the absurdity of the RBI directive on the issue.
“But I am hopeful of some solution; I am going to meet the Central Registrar tomorrow. We have about Rs 3 crore in deposit in the commercial banks but as of now we are not able to withdraw”, he lamented.
Operating at the grass roots level, these credit co-ops are touching close to 30 million poor, according to a report.
NAFCUB – the apex federation of UCbs and credit co-ops says there are about 1570 urban cooperative banks and over 50,000 cooperative credit societies that are registered under the Multi-state Cooperative Societies Act and various state cooperative societies acts.