Mushrif claims legitimacy of demonetised currency in Maharashtra district central cooperative banks, warns of deterioration risk

Kolhapur: Roughly Rs 101 crore of demonetised money, which is still lying with eight district central cooperative banks in Maharashtra, is legitimate, said state medical education minister Hasan Mushrif on Monday. Mushrif, who is also the chairman of the Kolhapur district central cooperative bank, however, warned that if the currency notes are kept with the banks any longer, they may get damaged.
Mushrif said he is hopeful that the Reserve Bank of India (RBI) will exchange the demonetised cash still parked with the district central cooperative (DCC) banks. In Maharashtra, the Kolhapur DCC bank has the highest amount of demonetised cash (Rs 25 crores) lying with it for the past eight years.
TOI reported on Monday that the banks are struggling to keep the cash from getting damaged. The currency notes are made of paper derived from wood, which is prone to termite attacks. Currently, the banks spray anti-termite chemicals on the currency notes every three months.
"The cash has to be kept safe in a separate strongroom. That space is unnecessarily occupied. The notes may get damaged if they are kept with the banks any longer," said Mushrif.
The minister said when Centre announced demonetisation, a decision was taken to exchange the demonetised currency notes within a specific time frame. "The RBI did not accept the Rs 25 crore that was with the Kolhapurs DCC bank. This happened with other DCC banks in Maharashtra too. At that time, we had complained to the finance ministry. The banks had paid the depositors out of bank profits. We moved a petition in the Supreme Court, which is pending hearing. There are several similar petitions in the apex court. That is why there is a delay. However, I am hopeful that the RBI will eventually have to accept these currency notes," said Mushrif.
The minister said the Ahmedabad-based DCC is also facing a similar issue. "A while back, Amit Shah, who is the cooperation minister, told Ajit Pawar, our finance minister, that the Ahmedabad DCC bank is also facing the same problem. As per rules, the cash currency belongs to the banks. The RBI has taken the information regarding the source of the cash. It's all legitimate," added Mushrif.
Shetti terms demonetisation a Tughlaqi decision
Farmers' leader and two-time former MP Raju Shetti said the demonetisation decision was a "Tughlaqi decision", a term often used for a wrongly conceived idea that sparks chaos and failure.
"If govt believes the money lying with DCC banks is black money, then it should initiate an inquiry. The money with the DCC banks belongs to smaller cooperative institutions, common people, and farmers. Therefore, the money lying with the banks due to the Tughlaqi decision of demonetisation is a loss to common people," said Shetti, addressing the media in New Delhi.