30-day relief for Maharashtra co-ops as RBI allows deposit of old notes

The Asian Age.

Business, Economy

Report says district cooperative banks can seek new notes as a replacement of old ones.

Old Rs 500 currency notes were banned lat year.

Mumbai: The Finance Ministry said district central cooperative banks can surrender their stockpile of Rs 500 and Rs 1000 scrapped notes with the Reserve Bank of India by July 20, according to a report on NDTV.

These banks have also been allowed to exchange the value of old notes by seeking new legal tenders. This is the second window provided by the government for depositing demonetised notes.

Finance Ministry statement

"Specified bank notes may be deposited by such Bank, Post Office or District Central Cooperative Bank, as the case may be, in any office of the Reserve Bank, within a period of 30 days from the commencement of these rules, and get the exchange value thereof by credit to the account of such Bank, Post Office or District Central Cooperative Bank, as the case may be, subject to the satisfaction of the Reserve Bank of the conditions specified in the said notification and the reasons for non-deposit of the specified bank notes within the period under that notification," read a government notification.

They should also cite valid reasons for non-deposit of the specified bank notes within the period, it said.

Earlier, reports had claimed that a number of district central cooperative banks did not have enough cash to give them to farmers. The situation has been worse in Maharashtra which has been facing massive farmer revolts.

Many cooperative banks said the RBI had not been accepting their huge stockpile of old Rs 1,000 and Rs 500 currency notes that were banned under the demonetisation drive started on November 8 last year.

Nashik's District Central Cooperative Bank told NDTV they still have a stockpile of Rs 340 crore in these junk notes.  "Unless this money is converted to new, payments will be hard to make," NDTV quoted Narendra Darade, Chairman of Nashik's DCCB as saying.

The 'abrupt' notes recall decision sucked out a total currency worth Rs 15 lakh crore form the banking system thus leading to long queues outside ATM booths and bank branches across the country.

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