Demonetisation: Distress messages go out from cooperative banks in rural India
RBI data says 370 DCCBs held deposits of Rs 236,890 crore as of 2014 while PACS had Rs 81,900 crore deposits.
Operations at 370 district central cooperative banks (DCCBs) and over 93,000 primary agricultural credit societies (PACS) have been severely hit with the Reserve Bank of India (RBI) slapping restrictions following the demonetization of Rs 500 and Rs 1,000 notes.
Urban cooperative banks (UCBs) to have complained to the RBI that commercial banks are refusing to provide them currency support, affecting their operations.
The RBI has not given any reason for the curbs on DCCBs and PACS — these are considered the lifeline of the rural economy, especially for farmers in states like Maharashtra, Kerala, Uttar Pradesh, Gujarat, Tamil Nadu and Karnataka — but banking sources said it could be related to lax KYC (know your customer) norms and money laundering in some cooperative banks.