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Finance Ministry gives nod to central cooperative banks to exchange their old currency

Mumbai: The Finance Ministry recently released a statement regarding Central Cooperative Banks exchanging their demonetized old notes with RBI.

According to NDTV report, the finance ministry has recently released statement that permits central cooperative banks to surrender their old notes with RBI by 20 July but with valid statements for their failure to miss the deadline.

This move would help the banks to exchange their currency with RBI and get the new currency in return. This is the second window provided by the government for depositing demonetized notes. The ministry has also allowed them to exchange old notes by seeking new legal tenders.

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” stated the notification.

The notification made clear that these banks should also cite valid reasons for non-deposit of the specified bank notes within the period.

Many districts central cooperative banks said they fell short of cash and hence could not give it to the farmers claimed earlier reports. Maharashtra is experiencing the worst scenario with the ongoing farmer revolts.

Many cooperative banks claimed that the RBI had not been accepting their old currency notes since the ban under the demonetisation drive last year.

Narendra Darade, Chairman of Nashik’s District Central Cooperative Bank told their bank has about Rs 340 crores of old demonetized money as junk notes and that “Unless this money is converted to new, payments will be hard to make,” NDTV quoted.

The move which caused cash shortage throughout the country, DC reported.