Kolhapur & Sangli DCC banks face cash shortage, claim currency supply slowdown

Kolhapur: The district central cooperative (DCC) banks of Kolhapur and Sangli have admitted that they are facing a shortage of cash as supply from currency chests has slowed down.Now, the Kolhapur DCC bank has appealed to account holders to use digital payments, cheque-clearing, mobile banking and UPI payment facilities to ensure that the burden on issuing cash is reduced to some extent. The KDCC bank has also written to the Reserve Bank of India (RBI) to intervene and bring cash supply to normalcy.Cash demand has increased at the moment, with various village fairs going on in rural area, during which farmers withdraw bills deposited for dairy and agricultural produce. KDCC bank requires around Rs15-20 crore in cash daily to issue to account holders, either from cash counters or ATMs. Bank officials alleged that cash supply has been reduced from the source to ensure that people divert to digital payments.KDCC bank managing director Gorakh Shinde told TOI, "We have written to RBI, stating that most of our customers are from rural areas and do not use digital payments as much. A large number of direct benefit transfer (DBT) scheme beneficiaries have accounts with us. Elderly beneficiaries of the Sanjay Gandhi Niradhar Yojana also cannot make digital transactions. They require cash."Earlier this week, two ATMs of a nationalized bank in Kolhapur ran dry as the bank did not possess the cash to refill them.Similarly, Sangli DCC bank's MD Shivajirao Wagh said they are facing a cash shortage since the last two months. "We are managing to get by with cash from other banks. Last month, we had to get cash from a private bank in Goa," he said.When TOI made enquiries at an SDCC bank branch, it was learnt that cash issuance has been limited to Rs25,000, following verbal directions from higher authorities. A branch official said, "We check based on demand. If cash is required for medical and marriage expenses, we manage to disburse it. But, if it is required merely to transfer funds, we insist on electronic methods."Elsewhere, TOI found that restrictions have also been placed on cash withdrawals at an urban cooperative bank in Latur. The branch is located in a Market Yard area, where traders and merchants frequently require cash in large sums.A senior official of a nationalized bank chose to stay unnamed and said, "In case of high cash demand (over Rs10 lakh), customers are being asked to intimate the bank in advance, so that this request can be fulfilled on a day when there is less cash withdrawal overall. A similar situation arose in Surat recently, with a cooperative bank facing a cash crunch till the RBI intervened to normalize supply."When the Satara and Nashik DCC banks were asked about a cash crunch, officials there denied facing any such situation.When TOI reached out to state cooperation minister Babasaheb Patil for comment, he said, "I will check on how many cooperative banks are facing this issue. I have no information as of now. However, some banks normally face a cash crunch now and then. All DCC banks have digital infrastructure in place for hassle-free digital transactions. Customers should adopt the digital mode largely in their routine transactions."