Coop banks mostly hit after demonetisation: Minister

Bhubaneswar: Cooperative banks in the state have been mostly affected due to the demonetisation, said Excise Minister Damodar Rout in the State Assembly here today.

Replying to a question raised by Congress MLA Chiranjib Biswal, he said, “Following the demonetisation, cooperative banks in the country were barred from accepting and exchanging the demonetized Rs 500 and Rs 1,000 notes. As a result, financial transaction in all cooperative societies in the state was discontinued. Taking note of the difficulties faced by the people in withdrawal of money from the cooperative banks, the Chief Minster had a written to Union Finance Minister seeking his urgent intervention. Even the Reserve Bank of India was also urged in this regard.”

Out of 4345 banks, 2076 are running with loss, Rout informed. He said farmers have bore the brunt due to halt in transaction in cooperative banks. Though they have been granted agriculture loans, they are not provided with the money due lack of hard cash in the banks.

He further said though the RBI has recently made some relaxation in the transaction norm for the cooperative banks, the latter is still running short of cash. However, there is some improvement in the situation and efforts are on restore normal functioning of these banks, the Minister added.