Home » national news » Demonetisation: AIADMK seeks release of Rs 3,000 crore to TN cooperatives
 
SPEED NEWS

Demonetisation: AIADMK seeks release of Rs 3,000 crore to TN cooperatives

News Agencies | First published: 23 November 2016, 14:31 IST
Indian-Rupees-PTI
Photo: PTI

Expressing apprehensions of agriculture taking a hit in the wake of demonetisation, ruling AIADMK on 23 November urged the Centre to implement a series of measures, including release of Rs 3,000 crore in currency to state cooperatives and allow credit societies to accept repayment of loans in scrapped Rs 500 and Rs 1,000 denominations.

In a memorandum submitted to Finance Minister Arun Jaitley, signed by AIADMK MPs including Lok Sabha Deputy Speaker M Thambidurai, they also listed out various steps taken by the Tamil Nadu government to benefit the cooperative sector which caters to the farming community.

"Rs 3,000 crore in currency may be made immediately available to the cooperatives in Tamil Nadu to meet the immediate crop loan disbursement needs during November and December 2016, in addition to the regular flow of currency on par with scheduled commercial banks," the memorandum said.

The state's cooperative loan target for the year 2016-17 was Rs 6,000 crore to 10.75 lakh farmers but only Rs 2141.67 crore had been disbursed for 3.54 lakh of them, even as 'peak agricultural season' during the current north east monsoon was underway, it said.

Due to non-disbursal of loan to Primary Agricultural Cooperative Credit Societies (PACCS) from District Central Cooperative Banks (DCCBs), nearly 8 lakh farmers will be adversely affected as they were not able to draw cash needed for agricultural operations, it said. PACCS, being non-banking entities as per Banking Regulation Act, 1949, were not eligible to receive the now defunct Rs 500 and Rs 1,000 notes even as they cannot withdraw more than Rs 24,000 per week as such society was treated as single account holder of DCCBs, it said.

"Due to this cash crunch, lending activity of PACCS, particularly crop loans and jewel loans has come to a standstill," it said. Non-issuance of crop loans by PACCS will 'jeopardise' agricultural operations in the peak Rabi season, it added.

The memorandum demanded that PACCS be allowed to accept repayment of loans by cash including in the high value currency "subject to safeguard prescribed by RBI," Centre or state government.

Further, DCCBs must be permitted to accept deposits in KYC (Know Your Customer) compliant accounts on par scheduled commercial banks, and they should be allowed to disburse funds to PACCS without the Rs 24,000 per week restriction, it said. "We urge you to immediately intervene in the matter in order to protect the farmers and poor in the rural areas, to allow the Cooperative Institutions, which have evolved over a period of time as a people's movement, to survive," it said.

--PTI

First published: 23 November 2016, 14:31 IST
 
MORE FROM CATCH