The now demonetised Rs 500 and Rs 1,000 currency notes. 

NABARD Attempts To Quell Demonetisation Controversy Around Amit Shah

Gujarat’s district cooperative banks processed fewer demonetised currency notes than Maharashtra’s, said a NABARD statement in what seemed like an attempt to defuse a controversy surrounding the Ahmedabad District Central Cooperative Bank.

News agency IANS reported earlier in the day that of all district cooperative banks across the country, the Ahmedabad DCCB collected the most banned notes in the week after demonetisation. And that Bharatiya Janata Party President Amit Shah is a director on the bank’s board.

The Ahmedabad District Cooperative Bank secured deposits of Rs 745.59 crore of the spiked notes in just five days after Prime Minister Narendra Modi made the demonetisation announcement. —IANS report published by The Quint

The IANS report, also published by several other media platforms, was based on responses to a Right To Information query by activist Manoranjan Roy. These replies were provided by the Chief General Manager and Appellate Authority, S Saravanavel, of the National Bank for Agriculture & Rural Development. NABARD supervises state and district cooperative banks and regional rural banks.

The report quotes Roy as saying “the amount of deposits made in the State Cooperative Banks and District Central Cooperative Banks – revealed under RTI for first time since demonetisation – are astounding”.

The report also noted that:

  • Rajkot District Cooperative Bank, whose chairman Jayeshbhai Vitthalbhai Radadiya is a cabinet minister in Gujarat Chief Minister Vijay Rupani's government, got deposits of old currencies worth Rs 693.19 crore.
  • The figures of Ahmedabad-Rajkot DCCBs are much higher than the apex Gujarat State Cooperative Bank Ltd., which got deposits of a mere Rs 1.11 crore.
  • Only seven public sector banks, 32 state cooperative banks, 370 district central cooperative banks and and a little over three-dozen post offices across India collected Rs 7.91 lakh crore – more than half (52 percent) of the total amount of old currencies of Rs 15.28 lakh crore deposited with the RBI.

Deposits of Invalid Currency

  • 7 public sector banks: Rs 7.57 lakh crore
  • 32 state cooperative banks: Rs 6,407 crore
  • 370 district cooperative banks: Rs 22,271 crore
  • 39 post offices: Rs 4,408 crore

On November 8, 2016 Prime Minister Modi announced that all currency notes of denomination Rs 500 and Rs 1,000 were invalid. The move withdrew 86 percent of India’s currency in circulation and impacted economic activity across the nation.

Within a week of the announcement, the Reserve Bank of India barred DCCBs from accepting or exchanging invalid currency notes. This was reportedly on fears weak vigilance of these banks would encourage money to be laundered through them.

While neither the BJP nor Amit Shah have issued any public response to the IANS story, Congress leader Rahul Gandhi was quick to react.

“Congratulations Amit Shah ji , Director, Ahmedabad Dist. Cooperative Bank, on your bank winning 1st prize in the conversion of old notes to new race. 750 Cr in 5 days!” Gandhi said in a post on his twitter handle.

NABARD’s statement emphasised that the Ahmedabad DCCB complied with all the Know Your Customer Guidelines of the RBI while accepting the demonetised notes.