Co-op banks run dry

Loan details of farmers at Ranchi-Khunti Central Co-operative Bank in the capital. (Hardeep Singh)

A.S.R.P. Mukesh, TT,  Ranchi, Nov. 25: The former Prime Minister's prophesy is playing out in Jharkhand where cooperative banks, the lifeline of the rural banking system, have stopped functioning, dealing a body blow to farmers, who have been cut-off from their primary source of funds in the rabi crop season.

All 112 branches of the eight banks in the state are shut, having stopped accepting demonetised currency from November 14 as per a government order. Neither can they get rid of the old Rs 500, Rs 1,000 notes - their lead banks cite space crunch - nor can they disburse new notes as they have not received supplies.

Also, the Union government's decision, announced a few days back, to allow farmers to buy seeds from government authorised outlets using old notes, has also fallen flat. For instance, Urguttu Large Sized Agricultural Multipurpose Cooperative Society (LAMPS) is unable to help farmers of Kanke as it has nowhere to deposit the old notes it collects from farmers wanting to buy seeds.

It is the same with other cooperative societies. No wonder cooperative banks observed a day-long strike today when the Opposition also tried to enforce a Jharkhand bandh to protest against amendments to the CNT and SPT acts brought about by the Raghubar Das government.

"What are we supposed to do now when normal banking has halted completely?" said S.C. Karmakar, the general secretary of Jharkhand State Cooperative Bank Employees' Union.

"This will rob us of our customers, shaking the very foundation of the banks in time to come," he rued.

A senior official of Ranchi-Khunti Central Cooperative Bank at Shahid Chowk explained why Karmakar's fears weren't unfounded. "This is the time when disbursal of loans for farm jobs is at an all-time high. Last year, our branch disbursed around Rs 40 lakh in loans during the rabi season. This time, there isn't a single paisa with us," he said.

Last year, Karmakar said, state cooperative banks of Jharkhand disbursed kisan loans to the tune of Rs 30 crore in the rabi season covering the winter months of November till February. "This season, however, no loans have been disbursed due to the cash crunch," he said.

There are eight central cooperative banks with 112 branches in all. In addition to Ranchi-Khunti Central Cooperative Bank, there are banks in Gumla-Simdega, Singhbum-Chaibasa, Deoghar-Jamtara, Dumka, Giridih, Dhanbad and Hazaribagh.

Cooperative banks issue loans through over 3,600 large sized agricultural multi-purpose cooperative societies (LAMPS) or primary agriculture cooperative societies (PACS). Bank sources explained that farmers first enrol themselves with LAMPS or PACS. LAMPS or PCS, in turn, register themselves with cooperative banks through which money, loans, or insurance are disbursed.

"Once a farmer is enrolled with LMCS or PCS, we fix a credit system for him depending on his requirement. This is valid for five years. Typically, limits range anywhere between Rs 5,000 and Rs 30,000 per season. This may increase or decrease depending on the farmer's repayment schedule," Karmakar said.

He said ever since the demonetisation of Rs 500 and Rs 1,000 notes was announced on November 8, cooperative banks across the state started accepting deposits. But that stopped after November 13. "After that, our lead banks, SBI, Bank of India, Dena Bank and others, stopped giving us money," Karmakar said, adding that they were unable to pay even those who were coming to withdraw money from their accounts.

"We don't have money," he said, "All that we are left with are piles of old notes. Now, our lead banks aren't taking it from us to deposit it in their chests citing space crunch. No one is talking about this problem," he added.

Abid Ali Anwar, a Kanke farmer who is also head of Urguttu LAMPS, spoke of their problems.

"There are 2,800 farmers enrolled with us. All want money, but I don't have money despite putting in an application to Ranchi-Khunti Central Cooperative Bank where we have an account. Where do we go?" he said, and explained why buying seeds using old notes was also not working.

"In remote areas, LAMPS or PACS are the only government authorised centres selling seeds. For example, I have 250 quintals of wheat seed stocks, over 200 bags of urea. But, these are lying unsold because while farmers are turning up with old notes, I can't accept them as I have nowhere to deposit them," Anwar said.

Sunil Munda, another farmer who is member of Upper Konki LAMPS, also in Kanke, maintained that 90 per cent of Jharkhand's farmers were linked to cooperative banks through LAMPS or PCS accounts. "Most farmers of rural areas have an account in a cooperative bank because it gives them centralised access to all their needs. But, now that these banks have stopped functioning, where do I go?" he said.

Munda said he wanted to take loan of Rs 30,000 during this rabi season. "Do I go hunting for new banks to open an account or tend to my field," he asked. "The rabi season has already begun. More the delay, more problems for me."