Nagpur: As you may know, Reserve Bank of India has directed all banks to observe public holidays on the second and fourth Saturdays of every month. Accordingly, our branches will now be closed every second and fourth Saturday starting with 12th September 2015. All other Saturdays of the month will be full working days and branches will follow their weekday timings.
As a result, Sept 12, 2015 will be the first holiday for all the banks. This new change has brought adverse effects on the functioning of various cooperative financial units, which may be examined as under:
The second and fourth Saturday as public holiday for banks coming under the Banking Regulation Act will adversely affect the functioning of the primary agricultural cooperatives and non-credit banks in the cooperative sector.
As per RBI guidelines on August 28, 2015 now the second and fourth Saturday of every month will be a public holiday for State Cooperative Banks (SCB), District Cooperative Banks (DCB) and Urban Cooperative Banks (UCBs) as well. Since the DCBs are the financing banks of the Primary Agricultural Co-operatives (PACs), their remaining shut down on such days would mean that the PACs and non-credit banks would not either draw the amount to pay the customers in case of necessity or deposit the excess amount, informed media reports from Tiruvantapuram.
It has been made compulsory for the PACs and non-credit banks to deposit the amount exceeding the retention limit with its financing banks, the DCBs. In such a situation the secretary of the bank has to carry home the amount exceeding the retention limit. In such a scenario, the secretary will have to pay the interest at the rate of 18 % as fine for the particular period, said the media reports.
In case of theft or burglary at the PACs and non credit banks, the insurance companies will not compensate for the amount exceeding the retention limit.
“The chances of money being diverted for private needs are also there. In such a scenario, the secretary or the official concerned controlling the finances will get the opportunity to rotate the amount for at least two or three days,” a Cooperative Department official on condition of anonymity pointed out.
A section of the employees in the PACs and non-credit Banks argue that as the functioning of their banks will be seriously impacted, there is no point in the institutions staying open on these days.
“ The PACs and non-credit societies also work under time schedules similar to those of nationalised, scheduled and other banks. If such banks were to remain closed and only the PACs and non credit societies function on such days, it will not get good business.
“It is better to declare a public holiday for these banks as well,” said Joshua Mathew, state vice-president of Kerala Cooperative Employees Front.
When contacted, Registrar of Cooperatives (RoC) S Lalithambika said she was indeed aware of the issue. And she promised to look into it.
“As of now, RBI guidelines allow banks with RBI licence to avail public holiday on second Saturday and last Saturday . The government has issued orders to the banks in the cooperative sector in this regard. For allowing the same to the PACS and non-credit societies, the issues involved have to be studied,” she said.
According to the RoC, she had indeed received representations from employees’ unions in this regard.