Kerala CPI(M), Cong join hands to shield co-op sector hit by demonetisation | india-news | Hindustan Times
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Kerala CPI(M), Cong join hands to shield co-op sector hit by demonetisation

india Updated: Nov 18, 2016 00:58 IST

People stand in long queues outside a bank to exchange their old Rs 500 and 1000 notes in Bhiwandi, Mumbai in Wednesday.(PTI Photo)

The ruling Left Democratic Front and opposition Congress-led United Democratic Front on Thursday decided to join hands to defend any move against the thriving co-operative sector in Kerala.

The government is also planning to call a special session of the assembly to discuss the situation arising out of the demonetisation drive. An all-party meet will be convened next week to discuss this.

Demonetisation has literally paralysed the three-tier co-operative banking sector in the state. With the Reserve Bank of India’s decision not allowing the sector to exchange scrapped Rs 500 and Rs 1,000 notes or receive fresh cash from the central bank in exchange of its own reserve, its banking system has virtually collapsed.

All banks in the state have downed their shutters for the last two days. The co-operative banking network in the state has Rs 60,000 crore deposits and at least 70% of these banks are being managed by CPI(M)-backed outfits.

“There is a concerted move to destroy co-operative banks in the state. BJP leaders are spreading canards that enough ill-gotten money and assets are stashed in these banks. The co-operative sector is the backbone of the state’s economy,” said chief minister Pinarayi Vijayan. He added that his government will block any move to weaken these banks. Vijayan has written a letter to Prime Minister Narendra Modi seeking his intervention.

Initially, these banks were allowed to accept redundant notes as deposits from account holders who meet KYC norms. However, the RBI later cancelled the permission, fearing they would help launder black money. The issue turned political, with BJP alleging that both the CPI (M) and the Congress have parked enough money in these banks.

“We are not against co-operative banks. We are only opposing the parking of black money in some of them,” said BJP state president Kummanam Rajasekharan, adding that these banks were duty-bound to reveal their deposits.

Vijayan and his team of ministers will sit on a dharna outside the RBI regional office in Thiruvananthapuram on Friday. Announcing this, the CM said the state would not allow the Union government’s move to weaken co-operative banks. “These dotting banks are the backbone of the state economy and the last resort of the poor. We will not allow the Centre’s game plan,” he said.

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