Gujarat government urges Centre, RBI to lift ban on DCCBs for exchanging currency

The Gujarat government has appealed the Central government as well as Reserve Bank of India (RBI) to lift the ban on District Central Cooperative Banks (DCCBs) from accepting or exchanging scrapped notes of Rs 500 and Rs 1,000.

The request by the state government followed representations it received from different quarters about cash crunch being faced by people, especially farmers, in view of the abolition.

Deputy Chief Minister Nitin Patel said RBI has barred DCCBs from accepting or exchanging defunct currency notes after receiving some complaints against them.

"RBI has told us a decision on lifting the ban would be taken once the ongoing inquiry into these complaints got over," Patel told reporters.

Last Sunday, the regulator e-mailed a circular to all the 18 Gujarat-based DCCBs, asking them not to accept and exchange the demonetised notes.

"DCCBs mostly operate in rural areas. Many farmers are having accounts in these banks. Thus, we have urged RBI as well as the central government to conclude their inquiry as soon as possible and lift this restriction," said Patel.

To help farmers facing difficulties in purchasing fertilisers because of the cash crunch post-demonetisation, Patel said the state government has instructed PSUs to accept cheques from agriculturists.

These PSUs, which have plants in Gujarat, include Gujarat State Fertilisers and Chemicals (GSFC), Gujarat Narmada Valley Fertilisers and Chemicals (GNFC) and IFFCO.

"We have asked these PSUs to put in place a system whereby farmers can buy fertilisers from their outlets by producing cheques if they do not have enough cash. We have also urged these PSUs to allow cooperative societies to procure fertilisers from them by paying in cheques," said Patel.