Ingalagi gram panchayat president has said that they will not allow the bank to open until it has enough cash

Karnataka villagers furious at shortage of notes lock up cash-strapped bank
news Demonetisation Thursday, December 01, 2016 - 10:04

Farmers and villagers in Kundagol taluk of Hubballi have locked up the grameena bank since the last two days as they could not withdraw amounts stipulated within the limits set by RBI, the Times of India reported.

The Karnataka Vikas Grameena Bank in Ingali village had been rationing cash to farmers queuing up for money and a source from the bank told TOI that they had not been receiving new currency notes, adding that they had set a limit of Rs 2,000 against the stipulated Rs 24,000 due to shortage of cash.

The bank services about 15 villages in the Kundagol taluk and Dharwad district including Ramapur, Hanumanalli, Tarlaghatta, Nalagudda and Kubhihal. After a long wait, angry farmers locked up the bank after sending away the bank staff, the TOI report said.

Villagers need cash to buy fodder, pay farmhands and construction labourers, buy construction material and for marriages. Also, there are medical emergencies and funerals. A source said the bank is so starved of new currencies that the maximum amount allowed to be withdrawn is Rs 2,000, against the RBI-stipulated amount of Rs 24,000. This has left the farmers fuming.

Bank manager Basavaraj Akki told TOI that the villagers had deposited about Rs 6 crore into the bank after the demonetization move. “The bank should have received Rs 1.2 crore fresh currency but we are receiving only Rs 2 lakh a day. This is not enough to meet the growing need of farmers. We need at least Rs 10 lakh a day,” the TOI report quoted him.

Ingalagi gram panchayat president Prabhugowda Shankagoudashani said that they would allow the bank management to reopen the bank only after it gets enough cash, the report said.

The shortage of funds in rural banks is being faced not just in Hubballi but other areas also.

The News Minute had earlier reported on cash shortage at banks in Mandya villages.

There are two banks that cater to more than 40 villages in the surrounding areas. 

With multiple banks to cater to, banks in Besagarahalli and Keelara had also introduced the rationing system.

The bank manager had told TNM that each person was allowed to withdraw Rs 5,000 only.

Also, post offices had stopped exchanging currency and were only allowing account holders to withdraw money.

This had angered the villagers, however, they did not resort to shutting down the bank.