Banned notes in hand, cooperative bank customers have nowhere to go
Thousands of account holders of the District Cooperative Bank, Ghaziabad, are in a bind, with the Centre issuing directives to stop over the counter exchange of the banned ₹1,000 and ₹500 notes. It was one of the few options left for cooperative bank customers to use the banned notes as the Reserve Bank of India (RBI) restricted district level cooperative banks from accepting scrapped notes as deposits.noida Updated: Nov 26, 2016 23:30 IST
Thousands of account holders of the District Cooperative Bank, Ghaziabad, are in a bind, with the Centre issuing directives to stop over the counter exchange of the banned ₹1,000 and ₹500 notes. It was one of the few options left for cooperative bank customers to use the banned notes as the Reserve Bank of India (RBI) restricted district level cooperative banks from accepting scrapped notes as deposits.
Majority of customers of cooperative banks do not have accounts in any other banks where they can deposit the banned notes.
Employees of the District Cooperative Bank, Ghaziabad, with branches at Raj Nagar District Centre in Ghaziabad and Mamura in Noida, observed a one-day strike on Friday to protest against the RBI decision. The protesters said the decision has hit farmers and economically weaker sections of society the most as they do not have alternative bank accounts.
The RBI initially sent a circular to cooperative banks banning them from exchanging scrapped notes. On November 17, the central bank released another circular asking cooperative banks to not accept the banned notes for deposits either.
According to the members of Cooperative Bank Staff Association (CBSA), Ghaziabad unit, the decision will hit their account holder base.
“Now, everyone will go and open a new account in other banks as we are unable to accept their notes. We are also licensed by the RBI. But such a decision will negatively affect our business and harass our customers,” Saroj Kumar, secretary, CBSA, said.
The Ghaziabad branch of the bank has over 10,000 account holders and the Mamura branch in Noida has 6,500 account holders. Bank employees said 90% of these account holders do not have an account in other banks.
“Over the years, we have developed relations with our customers and transfer of employees of our bank also takes place within the district. This develops a good rapport between the employees and customers as faces on either sides of the counter are familiar. Refusing to exchange banned notes and turning away customers are very hard for us,” Nitin Pawar, an accountant at Sector 66 branch of District Cooperative Bank, Mamura, said.
Many customers are now unsure about what to do with the banned notes.
“We were building a new house in the village and the labourers need to be paid cash to carry out the work. After the notes were banned, we have not been able to exchange or even deposit the old notes. Everyone in my family has their bank accounts in cooperative banks and we are now stuck with the notes,” Dinesh Yadav of Sorkha Village in Sector 115, Noida, said.
Some of residents are planning to open accounts in other banks.
“I have to open an account in another bank now as the sowing season is here and I have to buy seeds and fertilisers. However, every bank is crowded right now. So the account opening is getting delayed,” Satpal Yadav, a farmer from Sarfabad village in Sector 73, Noida, said.