Thiruvanthapuram: Kerala Chief Minister Pinarayi Vijayan and his cabinet colleagues will sit on a day-long ‘satyagraha’ in front of the Reserve Bank of India (RBI) regional office here on Friday protesting the effect of demonetization of Rs 500 and 1000 currency notes on cooperative banks.
They said that the move by the RBI to not allow these banks to accept deposits or change the existing notes is destroying the co-operative sector.
Cooperative banks in the state operate mainly in rural areas and play a crucial role in strengthening the economy of the state, empowering many people.
The state unit of the BJP has alleged that these banks are ‘an abode’ of black money and allowing deposits there cause the fight against black money to fail. While asking these banks to not accept deposits, the RBI also raised the concern of black money getting laundered.
Both the ruling Left Democratic Front (LDF) and the opposition, United Democratic Front (UDF), has reacted strongly to this allegation. Vijayan said that Kerala's cooperative banks are not abode of black money and there is a political conspiracy behind this move. He said that the public sentiment is against any efforts of crushing the cooperative bank sector and that needs to be expressed. The Opposition has also expressed their support to the government for in any action taken to tide over the crisis.
Meanwhile, state BJP leaders said that in many of these cooperative banks, black money is being deposited as people don't have to give any PAN card details while making the deposit.
BJP state president Kummanam Rajashekaran said that the satyagraha by the CM and his colleagues is sponsored by black money holders. "It is the black money holders aim to sabotage the central government's decision and the state government is supporting that,” he said.
There are allegations that the BJP is trying to attack the co-operative sector mainly because it the base of the CPM and Congress. J Prabhash, political analyst, said," In the cooperative sector, a major chunk is with the CPM and their popular mobilization happens through these primary cooperative banks. The next group who will be affected is the Congress and then the CPI. BJP does not have any base in this sector (sic)."
The entire cabinet sitting on the satyagraha shows the importance of these co-operative banks to the state as well as for the left front.
Former BJP state president V Muraleedharan said that the RBI is not giving them permission to function because they don’t have licence. "We suspect that there is a large amount of unaccounted money in these banks that is why there is such a knee jerk reaction from the government," he said.
The state has 1,551 primary cooperative banks with deposits of about Rs 1, 37,000 crore of which roughly 80% are given as loans for agriculture, marriages, home and two-wheeler loans.
The beneficiaries are mostly in rural areas with these banks in each panchayat or ward levels. Deposits can be made to about Rs 25 lakh without PAN details.
At the Karakulam Service Cooperative Bank on the outskirts of the city, staff told News 18 that the bank used to be buzzing with activity but now there are very few people. Rajan, who was in the bank to withdraw Rs 35,000 he had deposited for his daughter's wedding, said he was running pillar to post to get money but the bank does not have any cash to give him. The wedding is in three days. They gave him a cheque which he has to encash from another bank where he has an account which will take at least a day or two. The old man was in tears when he said that he doesn’t know what to do as this money was for marriage expenses but he has to buy groceries and vegetables.
Women from the local Kudumbasree unit, a self-help group for widows, were also in a dilemma due to the crisis in the bank. They work in a scheme where they collect cash from each of their members on a weekly basis and deposit it in the bank and whenever a member needs loan they provide from this. This women came with their last week collection to deposit in their account, but the bank cannot accept it, nor can they make any withdrawals from their account. They told News18 that they have an added problem that if they go to change their group's cash in bank, they will get inked and they won’t be able to change their own cash.
Raja Lal, president of one such bank, said," On 8th, we had Rs 3.25 lakh in the bank of which three lakh were in denominations of Rs 500 and 1000.” Now, they have no cash and the RBI has asked them not to accept any deposits.
“We don’t even have cash to give salary to our employees which comes around Rs 14 lakh," he added. He said that they are in a terrible situation as they are not able to give people their own deposits. Many loans have been passed but they are not in a position to give cash for anyone. The cooperative bank system is now frozen and this is causing a lot of hardships to the common man.
Meanwhile Thomas Issac, State Finance Minister, said that if the RBI has any doubts on the source of these transactions, they can always conduct checks. He added that there are trails left in every transaction so the IT department can conduct checks later, but in the name of that now they are adding to the trauma of the people.
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