Demonetisation: AIADMK seeks release of Rs 3,000-crore in currency to Tamil Nadu co-ops

AIADMK urged Centre to implement a series of measures, including releasing Rs 3000 crore in currency to state cooperatives and allow credit societies to accept repayment of loans in scrapped Rs 500 and Rs 1,000 denominations.

PTI November 23, 2016 14:37:31 IST
Demonetisation: AIADMK seeks release of Rs 3,000-crore in currency to Tamil Nadu co-ops

Chennai: Expressing apprehensions of agriculture taking a hit in the wake of demonetisation, ruling AIADMK on Wednesday urged Centre to implement a series of measures, including releasing Rs 3000 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 3000 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 2,141.67 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.

Demonetisation AIADMK seeks release of Rs 3000crore in currency to Tamil Nadu coops

Representational image. AFP

Due to non-disbursal of loan to Primary Agricultural Cooperative Credit Societies (PACCS) from District Central Cooperative Banks (DCCBs), nearly 8 lakh farmers would 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. The "hardships" being faced by farmers and members of PACCS and DCCBs in Tamil Nadu include that of severe cash crunch, collection of premium under Pradhan Mantri Fasal Bima Yojana by PACCS being affected, even as farm produce pledged by farmers in the credit societies cannot be released, it said.

The state government, in order to overcome farmers' 'distress', had announced a series of "emergent measures" like asking PACCS to continue sanctioning of loans following due procedure and provision of agricultural inputs through PACCS without insisting on cash payment among others, it said.

But, these would be successful only if there was adequate cash, it said while stressing Centre to implement its demands.

Updated Date:

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