Why demonetisation has ruined Kerala's happiness in particular
When Prime Minister Narendra Modi announced demonetisation on November 8, Kerala cheered the move against black money. Those who had no bundles of Rs 1,000 and Rs 500 currencies were thrilled. They had a reason to cheer. For, they had nothing to lose and only to gain.
They dreamt of a great day when the neo-rich and black money hoarders would be put on the path to peril. Some also talked about their arrest and prosecution. Even the hardcore communists who had previously called the PM “a black hole of democracy” joined in.
But their cheers didn’t last long. Soon, rural Kerala realised that demonetisation has ruined their lives too. Worse, the neo-rich and black money hoarders invented new ways to change old currency without sweating in the unending queues in the banks, while the cheerleaders were running from one ATM to another to get a few thousand rupees.
Even the government-run ration shops put up a no-stock board. Salaries were delayed and pensioners were asked to wait for the whole day to get a small sum.
Their struggle started soon after receiving their pension amount. They found that the new Rs 2,000 notes could not be exchanged as most shops didn’t have the lower denominations. The worst nightmare, however, started when cooperative banks were restricted from banking operations.
The pensioners preferred to keep their life saving in these rural banks as they offered them one per cent interest more on their savings. After five days of currency ban, RBI issued a circular banning these banks from accepting banned currency, hitting the section hard.
Kerala has 14 district cooperative banks with 783 branches across the state. Those who banked with district cooperative banks were spared. But 1,625 primary agricultural credit societies/rural banks with 4,200 branches were hit after November 8.
The district cooperative banks had old notes worth Rs 1,453.94 crore and primary cooperative banks had Rs 665.37 crore old notes totalling Rs 2,119.31 crore in old currency that could not be used for normal banking operations.
More than that, 928 employees’ cooperative societies, 3,841 school cooperative societies, 3,936 miscellaneous cooperative societies, 110 urban cooperative societies, 268 marketing cooperative societies and 304 agricultural improvement societies stopped their activities after the demonetisation move.
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| Activists holding a protest march to Reserve Bank of India against demonetisation of Rs 1,000 and Rs 500 notes, in Thiruvananthapuram. (PTI photo) |
Around 19 million account holders operate cooperative banks with an average 10,000 people keep their accounts in every village. They couldn’t withdraw their deposits as such banks were allowed to withdraw only Rs 24,000 every week.
Such banks had no new legal tender to lend. Nobody repaid their loans and their daily transactions were curtailed. The hilly districts like Wayanad, Idukki, Palakad and Pathanamthitta were worst affected.
Around 1,625 primary agricultural credit societies in Kerala cater to short-term credit needs of around 6.8 million marginal farmers of the state. In 2016, these societies have disbursed Rs 3,978.76 crore to the farmers. The farmers who availed short-term loans had to repay the loan in time for availing interest subsidies from NABARD or the state government.
They may not be able to avail fresh loans for the next season if they fail to repay the loan in time. It was a debt trap they were caged in. When they demanded an explanation, the bank officials blamed demonetisation.
The poor in Kerala have limited knowledge about banking operations in the state. The commercial banks have a total network of 5,675 branches across the state, of which only 443 branches are in rural areas. The common man of Kerala depends on the cooperative banks that have 4,200 branches in rural areas.
They know only two banking operations — either to deposit or avail loans. They may have mobile phones that can be used for daily banking purposes. But they are used to handling hard currency.
The cooperative banks in the state have a long history and started their operations in 1910. But their glorious services have nothing to do with India going digital. The poor are told to wait forever. They do remember the dark days of Emergency when police were meddling with their lives.
They knew how to respond when things go wrong. They have a vote and a conscience to elect their leaders. They had listened to their conscience without fail. What else they can do in the times of peril?
(Courtesy of Mail Today.)