Mumbai: The Reserve Bank of India (RBI) has conveyed to the Maharashtra government that some district cooperative banks (DCBs) are allegedly involved in hawala transactions in Uttar Pradesh, and have hence not been given licences for transactions involving old Rs 500 and Rs 1,000 notes. Also, the district banks have no mechanism to detect fake currency, which the RBI says is another reason why it's not keen to give DCBs the right to conduct transactions. However, Congress leader Radhakrishna Vikhe Patil and BJP leader Praveen Darekar have ridiculed these claims and alleged that the cooperative movement is in trouble due to demonitisation.
After a hue and cry over DCBs not being given the approval for transactions involving old currency notes, finance minister Sudhir Mungantiwar personally met RBI officials, requesting them to reconsider the decision. But the RBI was in no mood to listen. “RBI officials told me that some district banks in Uttar Pradesh were involved in Hawala cases. Also, the demonetisation decision was taken to battle counterfeit currency. There was information that Pakistan had planned to infuse counterfeit currency in India. In the backdrop of that information, the DCBs have no mechanism to check if fake currency has been deposited. The RBI has also quoted this as one of the reasons why these banks have been denied approval to transact old currency,” Mr Mungantiwar told the Asian Age on Friday.
He added that fake notes worth Rs 5.98 crore were detected in 2014 in Mumbai alone, adding that the figure was Rs 1.44 crore in 2015. There are 31 district cooperative banks in Maharashtra, with 3,746 branches with deposits worth Rs 70,000 crore.
But Mr Vikhe Patil has slammed the BJP-led government for its view about DCBs. “It’s ridiculous that one or two banks in Uttar Pradesh were involved in some irregularities and hence the entire network of DCBs has been barred from transactions. The Centre has restricted all the farmers from withdrawing their money, which is mostly deposited in these banks. The DCBs are regulated by National Bank for Agriculture and Rural Development (NABARD), which was not taken into consideration after demonetisation,” he said.
Mr Darekar, a BJP MLC and Mumbai District Central Cooperative Bank chairman, has approached the Bombay high court against the Centre's decision. “Just because of one or two irregularities, the entire system of DCBs cannot be denied transaction rights. The DCBs with good track records should be allowed to transact old currency. About 3 crore people are dependent on DCBs,” Mr Darekar said.
The hearing in this matter is on November 21.
