Deposits in 285 district cooperative banks across India surged six fold in the first four working days after demonetization on November 8, compared to a day before the announcement, according to a HT report.
An analysis of classified bank transaction data revealed DCBs deposited Rs 3,051.2 crore with public sector banks between November 8 and November 14.
This is six times the Rs 496.88 crore reserves in the DCBs on November 7.
Experts say most of the “black money” may have returned to the banks because of lax oversight, corrupt bank officials and fake deposits or accounts.
The Enforcement Directorate (ED) is investigating 300 cooperative banks, set up to expand banking in rural areas.
There are three types of cooperative banks in India, state cooperative banks, urban cooperative banks and district cooperative banks. All DCBs had been banned by RBI after reports of money laundering.
Nearly 100 urban cooperatives banks are also being probed by the ED.