Demonetisation is an eye-opener for district central co-operative banks (DCCBs), which need to join the digital bandwagon and offer customers additional services using technology, a top Nabard official said.

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Although DCCBs, so far out of the currency swap, have implemented the core banking system (CBS), they have a long way to go when it comes to offering digital services such as Internet or mobile banking.

"In the long run, demonetisation is an eye-opener for DCCBs. They have to be on digital platforms. They should ensure their customers are also digitally savvy," Nabard Chairman Harsh Kumar Bhanwala told PTI.

Nabard has put in a monitoring mechanism under its deputy managing director and a few chief general managers to monitor the fund requirements of DCCBs on a daily basis.

There are nearly 400 DCCBs and around 92,000 village-level primary agricultural co-operative societies (PACs) under them. DCCBs provide funds to PACs and farmers, and are a critical part of the agri credit chain, contributing around 17 per cent to the crop loan segment.

After the November 8 announcement of decommissioning Rs 500 and Rs 1,000 banknotes, RBI barred DCCBs from exchanging or depositing these scrapped bills. The move brought the cooperative sector to a standstill at a time when the rabi (winter) crop season has just begun.

The regulator, however, allowed DCCB customers to withdraw money from their accounts up to Rs 24,000 per week.

Bhanwala said Nabard has supported DCCBs to issue RuPay Kisan Credit Cards. However, the efforts from DCCBs in issuing such cards was not much as only 63 of these lenders have been able to issue such a card.

"Somewhere, the initiative at the DCCB level could have been better towards issuing RuPay Kisan Credit Cards. If these cards were adequately issued to farmers before demonetisation, then to some extent, the cash misery of their customers could have been reduced," Bhanwala noted.

"Farmers could have at least been able to withdraw Rs 2,000 daily through these cards for meeting their day-to-day nominal expenses."

He said only 260 DCCBs have so far installed ATMs and they need to put up more cash-dispensing machines, along with additional point of sale (PoS) terminals.

"Some of these DCCBs have been authorised for mobile banking and Internet banking, but the number is small. To use these channels, there is need to bring in a lot of digital literacy," Bhanwala said.

To make DCCBs part of the ongoing digital revolution, a lot of financial literacy efforts are required and Nabard has been supporting these co-operative institutions since the beginning, Bhanwala said.

"At all block levels, we have financial literacy centres, supported and funded by us, that are assisting co-operatives in this literacy endeavour," Bhanwala added.

RBI on November 22 asked Nabard to disburse up to Rs 23,000 crore to farmers.

"The team will monitor how much currency DCCBs are receiving from various banks and if there is a cash shortage, it will ensure the shortage will be made up," Bhanwala said.