As a result of demonetization, the cooperative banks in Kerala have suffered so far a massive erosion of about Rs 5,000 crore. This is about 8.3 per cent wipe-off of the total deposit base of the District Cooperative Banks (DCBs) of Rs 60,000 crore, reports New Indian Express.
Officials attributed the setback to shortage of currency notes in the market and the negative news on the cooperative sector after demonetization for the tepid response.
“There was a panic-like situation among the cooperative banks’ customers after the withdrawal of the high denomination currency notes. There were also restrictions imposed on the sector by the Reserve Bank of India (RBI),” said a senior cooperative official.
The DCBs offer about 1.5 per cent higher rate of interest than the private sector and PSU banks. This will ultimately help the DCBs when the restrictions are lifted, claim govt sources.